Are You Ready for the July 1, 2019 Changes to Employer Recordkeeping and Wage Theft Statutes?
On June 24, 2019, the Minnesota Department of Labor and Industry (DOLI) published guidance about Minnesota’s new statutory amendments regarding employer recordkeeping and wage theft. DOLI’s guidance can be found on its website. The new requirements (commonly being called the “Wage Theft Law”) are part of an omnibus bill that amends current statutes to add additional recordkeeping and paystub requirements for employers, as well as criminal penalties for wage theft committed with an intent to defraud. All provisions go into effect July 1, 2019, except for the criminal wage theft provisions, which go into effect August 1, 2019. Under existing law, employers are required to keep various records for three years. The Wage Theft Law requires the following additional records be kept by an employer:
The records must either be kept at the place where employees are working or kept in a manner that allows the employer to comply with the commissioner’s demand for inspection within 72 hours. If records maintained by the employer do not provide sufficient information to determine the exact amount of back wages due, DOLI has the statutory authority to make a determination of wages due based on available evidence.
The statutory amendments also add earnings statement (paystub) requirements. Existing state law requires earning statements be provided to employees in writing or by electronic means at the end of each pay period with specific information included on the earnings statement. The amendments will now require the following additional information be included on the earnings statements:
The simplest way to conform to the new recordkeeping requirements will be to implement a revised employee handbook containing all policies and have each employee sign the revised handbook, with the table of contents attached to the acknowledgment page. Employers who have previously had several different policies, some within a handbook and some free standing, will want to move to the single handbook format. Employers should start using the notice provided on DOLI’s website, or create their own that includes the required information, and provide a copy to each new hire, with their specific rate of pay, to sign at the start of employment. If there are any changes to the information contained in the notice, employers must notify the employee in writing prior to the date the change takes effect. Examples include change in rate of pay, change in exempt status, change in PTO accrual rates, etc. Employers should also review their earnings statements with their payroll providers to make sure they comply with the new requirements.
U.S. Supreme Court Allows Limits on Class Arbitration
Continuing its line of pro-employer decisions regarding arbitration, on April 24, 2019, the U.S. Supreme Court held that class arbitration is only available where the parties have expressly agreed to authorize class arbitration. In a 5-4 vote, the Court held that a court may not compel class arbitration when an arbitration agreement is silent on the issue. Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407 (2019) (judgment issued May 28, 2019).
Employers may now compel employees, as a condition of employment, to individually arbitrate any and all claims they may have against the employer. Through careful drafting of arbitration agreements, employers can generally avoid the prospects of facing class litigation or class arbitration, except in circumstances with a unionized workforce subject to a collective bargaining agreement that has its own arbitration provisions.
NLRB Grants Employers Greater Rights to Limit Union Activity
On June 14, 2019, the National Labor Relations Board (NLRB) overturned longstanding precedent which required employers to allow nonemployee union representatives access to the public areas of their property, such as restaurant dining areas and cafeterias (the “public space” exception). In UPMC, 368 NLRB No. 2, the NLRB overturned the public space exception, and held that employers no longer have to allow nonemployee union representatives access to public areas, unless the union has no other reasonable means of communicating with employees or the employer discriminates against the union by permitting access by similar groups. The NLRB observed that while the National Labor Relations Act requires an employer to refrain from interfering, restraining or coercing employees’ exercise of their statutory rights, the Act does not require that an employer permit the use of its facilities for organizing when other means of communication are readily available.
Employers should implement facially neutral rules to regulate conduct in the public spaces on their private property, including rules prohibiting solicitation by third parties. These policies should be written in neutral, albeit broadly-fashioned terms that are sufficient to reach, but not single out union or organizing activities. Employers should enforce these rules in a consistent manner as to similar conduct under similar circumstances.