Workers highlighted detrimental impact of wage theft across multiple industries during roundtable
39,000 Minnesota workers lose out on nearly $12 million in unpaid wages each year
Dayton-Smith Administration’s Wage Theft Prevention Act would strengthen workers’ rights and crack down on non-abiding employers
ST. PAUL, MN – Lt. Governor Tina Smith today led a roundtable discussion about wage theft with Minnesota workers, state legislators, and labor leaders. During the meeting, workers shared stories about how wage theft has affected them and their families. The Minnesota Department of Labor and Industry (DLI) estimates that over 39,000 workers experience wage theft in Minnesota each year, averaging $11.9 million dollars of wages that are owed, but not paid to Minnesota workers. This year, Governor Mark Dayton has proposed the Wage Theft Prevention Act to help address wage theft in the state.
“Wage theft is stealing. It’s not how we do business in Minnesota. Yet, it’s all too common – costing Minnesota workers nearly $12 million a year,” said Lt. Governor Tina Smith. “I urge the Minnesota Legislature to pass legislation cracking down on wage theft this session. Minnesotans work hard. They deserve to get paid for it.”
Wage theft occurs when employers do not pay workers what is owed to them for work already performed. There is currently no state law that prohibits or penalizes employers that do not pay their employees for work performed.
“There are a lot of families hurting today because of wage theft,” said Sen. Bobby Joe Champion (DFL-Minneapolis). “Passage of this legislation will help protect our citizens and become the first step in making sure workers will not have their hard-earn wages subjected to wage theft in the future.”
“It’s unconscionable that hard working Minnesotans are victims of wage theft,” said Rep. Tim Mahoney (DFL-St. Paul). “Minnesotans deserve respect and fair treatment from their employers; if that trust is violated, there must be a course of action to punish them. This legislation will not only protect workers and give them the tools to know if they’re victims of wage theft, it will empower our state government to fully investigate these crimes.”
State Sen. Jason Issacson (DFL-Shoreview) also participated in the roundtable, where he urged the Legislature to pass new measures designed to address wage theft.
Currently, DLI receives over 20,000 worker complaints a year related to wage and hour laws. At current staffing levels, DLI is able to investigate 1,500 wage theft and other violations every year. In the past five years, the Department has recovered over $4.8 million in back wages for Minnesota workers.
“Wage theft is a serious problem in Minnesota,” said Labor and Industry Commissioner Ken Peterson. “Our agency estimates that at least 39,000 workers suffer from wage theft in Minnesota each year. On average, DLI recovers $460 for each worker who was a victim of wage theft.”
Wage theft is most common in the following industries: cleaning/janitorial services, building and construction trades, and restaurants. At the roundtable, workers representing a variety of industries shared their personal experiences with wage theft and the detrimental impact it has on their lives.
“As a Latinx organizer it is extremely painful to witness that undocumented workers feel that they are unable or do not have the right to claim stolen wages, a lot of these workers fear losing their job or risk being deported and remain silenced,” said Gladys Gutierrez-Anaya of the Greater Minnesota Worker Center.
“Lakeville Motor Express broke our union contract by moving equipment and customers' business to a ‘new company.’ Then they closed down the company that I worked for 15 years without any warning and left more than 90 employees and our families without even our last two weeks of pay. It is, in my book, likened to being robbed and should be criminal for a ‘ghost’ company to continue doing business as if nothing happened and with no one to be accountable for these actions,” said Steve Satterlee, a member of Teamsters Local 120 and a 15-year employee of Lakeville Motor Express.
Governor Dayton Proposes Wage Theft Prevention Act
Governor Dayton and Lt. Governor Smith’s Opportunity Agenda for a Better Minnesota prioritizes the following provisions to be included in the Wage Theft Prevention Act:
- Providing Funding to Enforce Wage Theft Protections – Investing $1 million in the Minnesota Department of Labor and Industry (DLI) to investigate and crack down on wage theft.
- Defining the Law, Making Clear Wage Theft is Wrong and Illegal – Establishing a definition of wage theft and making clear it is illegal.
- Power of Subpoena – Giving the DLI investigators the power to subpoena documents. This power would help ensure the agency is able to compel production of records when employers refuse to submit them.
- Empowering Workers with Information – Requiring notice of information to be provided to employees at the start of employment, including employee rate of pay, the legal name of the employer, and the employer’s address and phone number.
- Creating Stiffer Penalties to Prevent and Crack Down on Wage Theft – Increasing penalties for employers that fail to keep employment records, and for employers that willfully or repeatedly violate wage and hour laws. The Governor and Lt. Governor’s proposal would create a criminal penalty (gross misdemeanor) for willful and repeated violations of wage theft laws.
- Issuing Citations for Wage Theft Violations – Increasing the fines for willful and repeated violations of wage theft laws from $1,000 to $10,000 per violation.
- Ensuring More Regular, Reliable Paychecks for Minnesota Workers – Requiring that employers pay employees every 16 days, rather than every 31. Under current law, an employee could work 41 days without knowing whether they were going to be paid or not. Under the Governor and Lt. Governor’s proposal, the maximum number of days would be 31 at the start of employment and 16 days thereafter.
