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Minnesota increasing efforts to enforce new wage theft law

ST. PAUL — Two Minnesota agencies are ramping up their efforts to root out wage fraud by adding staffers to enforce a new state law that penalizes employers for exploiting their workers.

Minnesota Attorney General Keith Ellison has added two lawyers to his office who will handle cases where companies are accused of cheating employees out of money they’re owed.

Meanwhile, the state Department of Labor and Industry is hiring seven new staffers who will exclusively investigate such claims, after the state passed one of the nation’s toughest wage theft laws in August, Minnesota Public Radio News reported Thursday.

Wage theft violations carry penalties that range from $1,000 to $100,000 and prison sentences of up to 20 years, depending on its seriousness.

Every year, more than  39,000 workers in Minnesota — many of them immigrants — are the victims of wage theft to the tune of nearly $12 million, total, in money owed, according to state Labor Department estimates.

“As soon as we put up the flag we got calls, a lot of calls,” Ellison said. “What could be more important than being able to put food on the table for your family? If you’re promised a certain amount of money and you don’t get it, that’s incredibly frustrating.”

Minnesota is one of just two states that makes it a felony in some cases.

Terri Gerstein, who helps states navigate wage and labor laws at Harvard’s School of Law, said cities and states nationwide are passing laws.

“States and cities are really standing up in this area and feeling the need to be leaders and take action and protect their people because of the way the federal government is rolling back workers’ rights and has been less aggressive in protecting workers’ rights in some ways,” she said.

The new law also expands notification requirements for employers. They must tell workers their pay rate, notify them of overtime and wage measures, and when they should expect to be paid. There are also new penalties for employers who fail to keep payment records, who don’t cooperate with the state in investigating a wage theft claim and for those who retaliate against a worker for complaining about their pay.

The industries that are the biggest wage theft offenders include construction, hospitality, agriculture, and home care workers. Within days of the wage theft law going into effect, a group of construction workers accused a firm of withholding their wages on a $40 million project in Rochester in 2018. Then there’s the burgeoning gig economy, including Lyft and Uber drivers who are sometimes paid less for the agreed upon service or not paid at all.

Nancy Leppink, commissioner of the state’s Department of Labor and Industry, said some of its new staffers will target those troublesome sectors.

“Many Minnesotans are living paycheck-to-paycheck, therefore not getting a paycheck or not getting all of a paycheck is something that makes a difference between a kid going to school hungry or not, or having a roof over their head or not,” Leppink added. “The importance is not complicated.”