Labor Law Changes Minnesota Employers for 2020

With the new year comes new laws that go into effect on January 1. We believe that staying up to date on local, state and federal can help employers plan for an effective hiring and recruitment strategy.

Here are a couple of changes that recently went into effect which could impact how you acquire and retain the best talent.

Minneapolis wage theft ordinance in effect

In August 2019, the city government passed an ordinance that would prohibit wage theft. Wage theft is a term that applies to several employer behaviors including:

  • Paying below minimum wage
  • Denying meal breaks or rest breaks
  • Withholding tips
  • Allowing employees to work off the clock
  • Improperly calculating or compensating overtime
  • Unlawful pay deductions

The actions in the ordinance largely mirror the state’s new wage theft statute, but with additional requirements on employers. It also gives the city the ability to investigate employers independent of state agencies. The state’s wage theft statute went into effect on July 1, 2019.

The ordinance applies to employers based on Minneapolis and any employee – including temporary and part-time – who work within city limits for at least 80 hours in one year. The ordinance does not apply to independent contractors or government employees.

Minimum wage increases to $10 outside MSP

Minnesota’s latest minimum wage increase went into effect on January 1, raising the minimum wage to $10.00 an hour. The minimum wage applies to large employers who have gross annual revenue of $500,000 or more. This is a 14-cent increase, or just shy of a 1.5 percent pay bump.

Small employers who have gross revenue of less than $500,000 are only required to pay workers a minimum of $8.15 an hour. This rate also applies to youth workers under age 18 and is the training wage for workers under age 20 who have been on the job for less than 90 days.

For comparison, the federal minimum wage is $7.25. It has not been raised since 2009.

These minimum wage laws do not apply to Minneapolis and St. Paul. That’s because those cities already have their own wage schedules in effect to reach a $15 minimum wage. Minneapolis employers with more than 100 employees have until July 1, 2022, to reach $15 minimum wage. Smaller employers have until 2024. In St. Paul the schedule is larger; the largest employers have until 2022 to get to $15 while the smallest employers have until 2028.

U.S. Department of Labor updates overtime law

The DOL updated the minimum salary thresholds or exempting executive, administrative or professional employees from minimum wage and overtime pay requirements. The minimum salary threshold has increased to $684 per week, up from $455 per week. Employers can use nondiscretionary bonuses and incentive payments to satisfy at least 10 percent of the salary level.

These requirements are outlined in the Fair Labor and Standards Act (FLSA). The duties test for exempt employees remains the same; however, the minimum salary threshold had not been updated since 2004.

Keeping track of ever-changing labor laws is tough. We’re here to support you in creating a hiring strategy that fits your needs and grows along the way. Contact us to learn more.