It seems like a straightforward concept that should be easy to enforce: A day’s work for a day’s pay.
But it’s not that simple for Minnesotans who are victims of wage theft.
Juana Cinto says she never got her last paycheck when the day care center she worked at suddenly closed. Later, the owners reopened under another name.
“We are still fighting to get my wages,” said Cinto, who lives in Minneapolis and hopes a small claims court will help her recoup the $1,025. “It’s very frustrating. I have to wait for pay for hours I’ve already worked.”
Mayela De La Rosa says she and her husband, Eduardo Clara, were never paid for several cleaning jobs. The restaurateur later told them that in the U.S., clients who weren’t happy could pay what they want or not at all.
“It definitely affected us economically, but it also affected us psychologically,” said De La Rosa, of Minneapolis. “We worked hard to get this job done, and to realize the owner didn’t want to pay us was humiliating.”
Jamie Xolop put in three months of work renovating houses in St. Paul, but says he hasn’t seen a dime of the $10,000 he’s owed.
“In all the years I’ve been working, I’ve never experienced this until now,” said Xolop, of Burnsville. “It’s affected me greatly. I feel like it is not honest and just to have been working so long and not receiving the money I need to sustain my family. I’m worried.”
The Center of Workers United in Struggle is trying to help all three recoup their lost pay. They spoke to the Pioneer Press through interpreters.
Cinto, De La Rosa and Xolop are just three of the roughly 30,000 Minnesotans state officials estimate lose $12 million a year to wage theft. Their stories are why state lawmakers recently strengthened protections for workers and penalties for employers who don’t pay, underpay or dock employees’ wages in unsanctioned ways.
“It is a matter of dignity,” Attorney General Keith Ellison said at a recent news conference with Gov. Tim Walz highlighting the state’s new wage theft prohibitions. “In Minnesota, people should get the money they worked hard for and earned.”
The bipartisan group of state lawmakers who crafted the new rules approved by the Legislature in May say Minnesota now has the toughest wage theft laws in the nation. They hope the new penalties, which include felony charges and jail time, will deter unscrupulous business owners from taking advantage of workers.
State Rep. Tim Mahoney, DFL-St. Paul, the chief sponsor in the House, said the bill’s passage was a high point in his legislative career. “The bad apples that steal from people are why we have to do this,” Mahoney said. “We cannot continue to treat working people that way.”
Mahoney spent three weeks negotiating the final bill with Sen. Eric Pratt, R-Prior Lake, the Senate chief sponsor, and other lawmakers.
“It really shows we can put aside partisan differences and do what is right for the people of Minnesota,” Pratt said. “We agreed on the core value: If you earn a wage, you should be paid a wage. If you’re stealing someone’s wages, you should pay a penalty.”
New Rule for Business
Lawmakers say the key to winning bipartisan support was addressing objections from the business community whose leaders feared some of the new regulations could punish business owners for innocent payroll errors.
That came down to including the need to prove “intent to defraud” a worker in order for a business owner to be charged under the criminal part of the new statute. Employers who purposely steal wages from workers can face one to 20 years in prison and fines ranging from $500 to $35,000.
Lauryn Schothorst, director of labor and management policy for the Minnesota Chamber of Commerce, says finding a fair balance was key.
“The Minnesota Chamber worked hard to pass the compromise state legislation that will help protect employers who inadvertently find themselves in violation of certain wage laws while increasing penalties for employers who intentionally shortchange paychecks.”
Employers also face new requirements for documenting worker pay. Under the changes, employees are required to receive specific explanations about how they are paid and what is deducted from their checks.
When an employee’s compensation changes, businesses have to update the paperwork. The clerical rules went into effect July 1 and the new criminal penalties will be in place Aug. 1.
Employers are scrambling to make sure they are in compliance with the law, Schothorst said. “It is an added stress for Minnesota businesses who don’t want to do something wrong in the first place.”
To combat wage theft, the Minnesota Department of Labor and Industry is doubling the number of staffers investigating claims from workers. The department will soon have roughly 16 staff working on wage crimes and Attorney General Ellison is also adding two staff members in his office.
Minnesota will spend about $2 million a year enforcing the new wage theft rules and investigating allegations, said Nancy Leppink, Labor and Industry commissioner. The majority of complaints will come through Leppink’s office, but other state agencies, local governments and federal entities will also be involved.
Leppink acknowledges wage theft can be difficult to investigate, but she says new requirements that employers clearly explain pay to their workers will make it easier. “That really provides the worker with better information and a better understanding of how their employment is going to work,” Leppink said.
Even with the new funding and staff, Minnesota will have a limited ability to investigate complaints from workers. Advocates at the Center of Workers United in Struggle note that few cities have dedicated staff to investigate wage theft, leaving state officials to cover millions of workers.
To better enforce wage theft laws, Leppink says the state not only needs more investigators, but it needs to use the data from those investigations to identify workers most at risk. That covers a lot of industries — from construction workers to restaurant staff.
Then state officials need to improve outreach to those workers so they will be more likely to report problems.
“We don’t know how many workers are in a situation where the law is not being complied with,” Leppink said. “There’s a lot of folks who never come forward. People are too afraid to complain.”
That’s one reason wage theft is such a problem in immigrant communities and why Ellison promised to thoroughly investigate allegations made by all workers.
“You are not entitled to steal people’s wages based on their immigration status or lack thereof,” Ellison said.
Wage theft victims Cinto and De La Rosa say informing workers about the new law will be the state’s first big challenge. When workers know there are real consequences for unfair practices, they are more likely to file reports.
“These consequences will make people think twice about (stealing from workers),” Cinto said. “Don’t be afraid to speak up. We have protections now. Wage theft is a problem and we want it to end.”