I'm a winnerIn an earlier post regarding payroll deductions, I promised to write about the unique aspects of deductions from a sales employee’s commissions. This topic is always ripe for discussion.  Why? Well, good salespersons will make great commissions! They are winners. They don’t like to lose sales – or money.  They are usually very aware of what they have sold and the related commission. Accordingly, when they see a deduction on a commission, or a commission less than they expected, naturally their radar goes on high alert.  I can’t blame them, this is their bread and butter after all – and this is what drives them; these are folks generally highly motivated by monetary compensation – which is the whole point.  They bring in revenue for the business and want to be rewarded accordingly.

There are actually two different aspects to salespersons commissions – with an extremely important distinction between the two. First, when can an employer deduct from commissions owed, due to errors or omissions? Second, when can an employer reduce a salesperson’s commission not due to the salesperson’s errors or omissions?  Hopefully I can help clarify. However, for purposes of this post, I should specify that this is all about employed salespersons – not independent contractors.  Commission salespersons who are independent contractors have their own prompt payment statute and that would throw us off track here.

Making Deductions From Commissions Due to Errors or Omissions

As I mentioned before, Minnesota law (Minn. Stat. 181.79) treats sales commissions differently when it comes to allowing wage deductions. Indeed, the wage deduction requirements for faulty workmanship, loss, theft, or damages do not apply when an employer has rules related to commissioned salespeople, when the rules are used “for purposes of discipline, by fine or otherwise, in cases where errors or omissions in performing their duties exist”.   Continue Reading Making Deductions and Adjustments to Commissions

Stop OvertimeFun fact – the Fair Labor Standards Act (FLSA) does not allow the “banking” of overtime hours (or “comp time”) from one workweek to the next.  This is when an employee works overtime hours one week and then instead of getting paid the overtime that week, takes extra time off the following week.  Employees love it.  Employers love it.  The DOL and MnDOLI do not.

The FLSA states that a non-exempt employee (hourly or salaried plus overtime) who works more than 40 hours in a workweek is entitled to overtime for all hours worked. Similarly, the Minnesota Fair Labor Standards Act (MnFLSA) does not allow banking overtime hours after 48 hours in a workweek (if you are not subject to the FLSA, Minnesota’s overtime requirement applies over 48 hours versus the 40 hours under the FLSA).

Can An Employee Agree to Comp Time or “Banking” Hours?

What if the employee asks or agrees to bank hours worked this week to take more time off next week with the same pay?  Is that okay?  Nope.  An employee cannot contract for lesser rights than he or she is allowed under the FLSA or MnFLSA – even if the employee wants (and usually begs) for it.

Are there any exceptions?  Of course!  The FLSA allows public employees (under a collective bargaining agreement, MOU or other agreement) compensatory time in lieu of overtime compensation, at a rate not less than one and one-half hours for each hour of employment for which overtime compensation would be required.  29 U.S.C. 207(o).  For private employers – no can do.

Can An Employer Change the “Workweek” To Spread Out Overtime Hours?

There are certainly ways an employer may handle overtime, however, such as in their definition of the “workweek”.  Surprising to some (it’s like a two-for-one Friday Fun Fact!) – the FLSA does not define “workweek”.  The DOL regulations set forth how to determine the workweek (29 CFR 778.105), which is a “recurring period” of seven consecutive 24-hour periods. Though it is often Sunday- Saturday, that does not need to be the case.

A workweek can start at any time, on any day.  If, for example, an employee always works a disproportionate amount of hours say between Thursday and Sunday, the employee’e workweek could be determined to be Saturday – Friday.  Thus, splitting up the four most heavily worked days. However, keep in mind that an employer can’t simply move around the “workweek” each week or so to suit the overtime needs.  The “workweek” established is supposed to be permanent – if it changes, it is supposed to be a permanent change.  The DOL’s regulations specifically address how to calculate overtime when a workweek changes (29 CFR 778.301–302).

Don’t Forget About Recordkeeping!

It is so tempting to say yes when a hard-working employee wants to just get that project done this week and take an extra day off next week to go up North.  Yet, you are a savvy HR professional and know that the employer is ultimately responsible for keeping an accurate record of all hours worked by the employee.  Even if the employee “agrees” to “just record” the hours in the following week – you know that’s no defense to a wage and hour lawsuit.  As I wrote about in an earlier post, the FLSA’s recordkeeping requirements are the duty of the employer – not the employee (though employers ask employees to assist in this regard, it doesn’t change the employer’s duty).

To summarize, I can tell you this.  Time and time again, I see the employer that bends over backwards for an employee as the one that gets sued – often for doing exactly as the employee has asked.  And I know they can make a very convincing argument.  As much as you want to allow the employee to bank hours as a “benefit”, just say no!

Thank youOkay, I admit that I only recently poked fun in one of my posts at the idea that every day is some sort of “__ Day”.  However, today is Administrative Professional’s Day and I can’t let it go by without sending a shout-out and thank you to those who support us crazy, neurotic, Type-A attorneys.  Having first been a paralegal for 8 years, I’ve been there – done that.  We ask you to work on 15 things at the same time, wait until THE VERY LAST POSSIBLE minute to file something (with multiple exhibits and attachments to the attachments, nonetheless), and change one word or two right before filing (hey – it has to be perfect!), throwing off that word count after the certification has already been prepared.

As long as I’m on my laundry list, let’s see…we change a “final” correspondence (already printed on the nice letterhead) at least twice before it “has” to go out that day; decide something should be sent via messenger instead of U.S. Mail and then change our minds again; and ask you where things are saved on the system – that we created.  Genius.  Oh, and don’t forget you are supposed to have ALL the filing rules memorized as well as service of process, filing fees, and pretty much everything else our tiny brains can’t retain.  And, can you just do this one thing “super quick”?  You always do.

I hope I treat you right – I know I try and am far from perfect.  But I expect that if I need a smack upside the head back into reality, you’ll not hesitate to deliver.  So, today’s post is my hat’s off to Linda, Sue and Melissa. Because, we don’t tell you enough that we appreciate you, value you, and frankly, can’t do what we do without you!

employerguide-tnIt’s always fun to get an email from the Department of Labor (DOL) that has information helpful to employers.  It happens.  Really.  The DOL’s Wage and Hour Division just released its new The Employer’s Guide to The Family and Medical Leave Act. This Guide, arrived hot off the press in my email inbox this morning, is intended to “provide assistance to employers and help[] increase their knowledge of the law”, by providing essential FMLA information concerning employers’ duties under the law, and options on how to properly administer such leaves.

Keep in mind that this is only a GUIDE, and is not a substitute for keeping abreast of changes in the law, state or local laws and ordinances that would provide greater protections to the employee, and case law that interprets the FMLA differently.   I’d think of it like a GPS – it can help you navigate to a certain extent but isn’t always reliable; if not updated with the latest software it may have bugs, not recognize construction, and eventually gets out of date.  It can help you navigate to a certain area, but then you should verify that what you found is indeed correct (recall that Google Maps error causing the wrong house to be demolished!).  A defense to any action is not “the DOL’s Guide said so”!

In addition, the DOL issued a new Employee Rights FMLA poster with a revision date of 4/2016. The old posters are just fine and can still be used, but the new poster is, well, prettier?  Not much more to say here – just be sure if you are a covered employer that you have the notice posted in a “conspicuous place where employees and applicants for employment can see it” and at all locations.

Money arm wrestingQuite often I will get asked by employers if it is okay to deduct certain items from either an employee’s payroll or a final paycheck.  In fact, in almost every termination that I walk a client through, this issue comes up  – whether it is an outstanding credit card payment (the trouble employee was reimbursed months ago but still hasn’t paid the company’s card off), uniforms not returned, or other items “held hostage” by the employee that certainly has a value.  While there is a bit of arm wrestling that needs to take place – it can be done!

Minnesota’s Wage Deduction Laws

In Minnesota, there are only limited permissible deductions an employer can make from an employee’s paycheck without the employee’s permission.  Minn. Stat 181.79.  Specifically, an employer can’t deduct an employee’s pay “for lost or stolen property, damage to property, or to recover any other claimed indebtedness” unless the employee voluntarily agrees in writing to the deduction after the loss has occurred or the debt arisen. Note the word “voluntary” is very important – it is likely not voluntary if it is a “sign here or lose your job” option.

Certainly, “normal” payroll deductions can be made if acknowledged in writing such as paying union dues, life insurance premium, health insurance, dental insurance, contributions to local arts councils or science counsel, political action committee, or membership dues of certain relief associations.  Minn. Stat. 181.06.

Exceptions to the Rule

Of course lawyers love exceptions to rules.  There are exceptions to the above for employees covered under a collective bargaining agreement (union employees) so we need to put those folks aside for now.  Commissioned salespeople also have unique circumstances related to deductions, which is a topic for another post.  Another exception to the above rule – an employee may agree to deductions for a loan or purchase (before the loan or purchase is made) from an employer if voluntarily agreed to in writing.  Finally, no surprise here, but deductions may be made as a result of a Court order.

A final quirky deduction fact (I know, and it’s not even my fun fact Friday!) – employers can deduct up to $50 from an employee’s wages (without prior written permission – though it would be best practices to acknowledge it in a writing signed by both parties) for the following:

  • Purchased or rented uniforms or specially designed clothes required to do the job (and which wouldn’t generally be worn outside of work)
  • Purchased or rented equipment used to do the job (but not tools of a trade, car or other equipment used outside of employment)
  • Consumable supplies required to do the job
  • Travel expenses (except those incurred traveling from work to home)

Minn. Stat. 177.24.  However, the $50 (or whatever less was deducted) must be paid back to the employee at the time of termination.  If the employer pays for any of the above and/or reimburses the employee full for it, the employer may require the employee to surrender those items at the end of employment. Accordingly, another best practice is to have a list of what the employee was provided at the beginning of his or her employment (and updated as appropriate) – signed by both the employer and employee – noting whether a deduction was made and in what amount.  Thus, at the end of employment there is no dispute who owns the iPad, laptop, polo, cell phone, etc., and whether the $50 is owed back to the employee.

The Employee Agrees to a Deduction – Now What?

Let’s say the employee  acknowledges the past debt (remember, the authorization has to be for a debt already occurred), now what?  Well, don’t forget that any deduction made cannot drop the employee’s wages below minimum wage for that workweek. Accordingly, it is a good idea once the employee has agreed to the deductions, to set forth what payroll(s) the deductions will be made, and in what amount, showing that minimum wage will always be met. In addition, no deduction can be more than the amount allowed for garnishment or execution on wages – so be careful if the employee has numerous deductions and other garnishments such as child support – I have seen it where an employer could not deduct anymore given the priority in garnishments, etc.  What’s that all about? Yet another post…too much to digest it all here.  Basically, if you have a large sum to deduct, you can only deduct a certain percentage of a person’s paycheck at any one time (but it’s much more complicated than that) and so you need to review those rules if that occurs.

What if the Employee Refuses to Authorize a Deduction?

Well, you now know that you can’t mess around with an employee’s wages outside of what is detailed above (generally). So, what’s an employer to do? Discipline.  Too often employers forget that an employee may be disciplined for theft, losses, faulty workmanship, etc. (it just can’t then be in the form of a payroll deduction).  So, while the employer will not recoup that money through a payroll deduction, certainly there are other non-monetary ways to get the point across.

Deductions Under the FLSA

We can’t forget about federal laws.  Similar to Minnesota, again, an employee’s wages can never go below minimum wage.  The FLSA does not consider uniforms or other items “primarily for the benefit or convenience of the employer” to be included as wages, and thus, the value of those items can’t be counted towards meeting minimum wage (or overtime) obligations. However, an employer may deduct the cost of uniforms over multiple payrolls so long as minimum wage is met (and, by Minnesota law, the employee voluntarily authorizes the deduction).

PrinceMinnesotans – along with the nation – were shocked to learn yesterday that Prince passed away at his home, Paisley Park Studios, in Chanhassen, Minnesota.  Naturally, when I heard of all of the memorials and fans headed to Paisley Park to pay their respects (after the rain, nonetheless leaving a beautiful rainbow over the property), the first thing I thought about is employees calling in “sick” in the next few days and wanting to take time off for bereavement.

So, what are an employer’s obligations with respect to bereavement leave in Minnesota?  Surprising to some, none whatsoever (this is my fun fact – certainly not the fact that a legend has passed – indeed, I am wearing my purple for Prince today!).

There is no Minnesota state law or rule that requires bereavement leave, whether paid or unpaid, yet almost every employer acknowledges the need for this benefit. Most employers do have some sort of bereavement leave policy for immediate family members, whether 1 day unpaid or 3 days paid.  Thus, although many claim Prince as part of our larger Minneapolis family, employees desiring to take time off to pay their respects to Prince will likely have to dip into vacation or paid time off. #RIPPrince

Asphault truckI love it when I get to toot our own horn (pun intended)!  In a huge victory for hauling companies (represented by Seaton, Peters & Revnew), the Minnesota Supreme Court reversed the Minnesota Court of Appeals on April 20, 2016, and held in J.D. Donovan, Inc. v. Minnesota Department of Transportation, that the transport of asphalt cement from a commercial oil refinery to a contractor’s facility (not the work site) is not subject to the Minnesota Prevailing Wage Act (MnPWA), as those hauling activities are not “work under the contract” as required by Minn. R. 5200.1106.

Specifically, the Supreme Court held that “work under the contract” is limited to hauling activities to, from, or on the site of a Minnesota public works project:

Minn R. 5200.1106 requires that hauling activities be to, or from, or at the site of a public works project in order to constitute ‘work under a contract’ within the meaning of the Prevailing Wage Act.”

The Minnesota Department of Transportation (MnDOT) argued that hauling activities do not have to take place at a project work site to be considered “work under a contract” so long as the materials were for a public works project.  Of course, the MnPWA does not define the term “work under a contract” and the rules are silent.

The Facts of the Case

In this case (actually a consolidation of two), MnDOT awarded contracts to prime contractors OMG Midwest, Inc., d/b/a Southern Minnesota Construction (SMC), and Hardrives, Inc. Both of these primes furnished all services and materials needed to complete the work in the MnDOT contracts, which (important here) included incorporating a certain grade of asphalt cement in the asphalt concrete mixture that would be used to pave the highway.  SMC and Hardrives agreed to obtain this asphalt cement from a MnDOT-certified oil refinery. Enter J.D. Donovan, Inc. (Donovan) and Wayne Transports, Inc. (Wayne).

Donovan purchased asphalt cement for both SMC and Hardrives’ projects from the MnDOT-certified oil refinery, and resold it to SMC and Hardrives.  Accordingly, Donovan’s truck drivers hauled the asphalt cement from the refineries to SMC’s and Hardrives’ permanent asphalt mixing facilities (not the project work site).  At the mixing facilities, the asphalt cement was pumped into storage tanks to use to create the asphalt concrete later for the projects.  Donovan didn’t deliver directly to either project work site, nor provided any hauling services at either work site.

Wayne is a common carrier with for-hire trucking services and provided services for the Hardrives project only, transporting 1,129 loads of asphalt cement from the MnDOT-certified oil refinery to Hardrives’ permanent asphalt mixing facility. 7 of the 1,129 loads were used for the Hardrives project – though Wayne did not know that.  Like Donovan, Wayne did not delivery directly to the project work site and didn’t provide hauling services at the project work site.

The Court’s Opinion

At the end of the day, MnDOT acknowledged at oral argument that it had never before attempted to apply the MnPWA to deliveries of asphalt concrete from oil refineries to the prime contractor’s facilities and that it simply did not enforce it until now.  To that, the Court noted, “We likewise find it difficult to believe that DLI, MnDOT, and the Legislature all happened to overlook or ignore open and pervasive hauling activities – hauling activities that are customary in the construction industry – for more than two decades had they understood that those hauling activities required the payment of prevailing wages.”

In other words, the Court simply did not buy into MnDOT’s recent attempt at overreaching its authority to contractors not working on a public works project, but indirectly supporting the project.  This opinion is a huge victory for hauling companies and will certainly change the enforcement attempts by MnDOT moving forward.

AirplaneIf Neal Page (Steve Martin) and Del Griffith (John Candy) were hourly employees paid for their travel time, they would have had a nice paycheck! Indeed, how should hourly employees be paid to travel?  Minnesota does not have a law stating how employers must pay hourly employees who travel overnight away from home, so we look to the FLSA (Fair Labor Standards Act) and DOL’s (Department of Labor) corresponding regulations.  29 C.F.R. 785.33-785.41 sets forth how to apply the Portal-to-Portal Act (an amendment to the FLSA) to travel time.

Though the adventure in Planes, Trains and Automobiles is one-of-a-kind (and brilliant at that according to Roger Ebert!), certainly overnight traveling can feel like it is all work.  Does an employer have to pay for the employee to sit at the airport or on the airplane?  How about to answer work emails at the hotel?

What Is Travel Away From Home Community?

As it relates to “travel away from home community”, if the travel keeps an employee away from home overnight, that is considered “travel away from home”.  Any time spent in “travel away from home” is considered work time when it “cuts across the employee’s workday”.  What the heck does that mean?

Well, during the normal workday, the DOL assumes the employee would typically be working during that time if not for the travel and thus, the employee is substituting travel for his or her other duties and must be paid during that time.  Further, this applies no matter the day of the week.  So, if the employee typically works Monday – Friday from 7 a.m. to 4:00 p.m. with a 1 hour lunch break, any travel during those times no matter the day of the week (including the weekend) are considered hours worked.  As usual, the regular meal period does not count and need not be paid.

What About Time As A Passenger or Sitting At the Airport?

Airplane PassengersTime spent as a “passenger” is not considered work time if outside of regular work hours, if the employee is a passenger on a plane, train, boat, bus or car.  In other words, so long as the employee is just going for a ride (in our example, between the hours of 4:01 p.m. and 6:59 a.m. ) that time does not need to be paid.  Certainly, an employer may choose to pay the employee for that time, but is not required to do so.  Accordingly, it is not uncommon for employees to work their regular work during the regular workday and then travel outside of their normal hours; then the work still gets done, and the employer does not need to pay the employee for the time spent traveling as a passenger.

Also, keep in mind that time “as a passenger” is not the same thing as time sitting at the airport! Sitting at the airport waiting for a plane to arrive does not make a person a “passenger” and the DOL will likely consider that as work time spent in travel away from home outside of regular working hours.

What If the Employee Works While On The Plane, Train or Automobile?

Here is where recordkeeping issues and disputes most often arise. Despite the above, if the employee is traveling as a passenger outside his or her normal work hours and is “required to work” while on the plane, for example, that time actually spent working is work time – even though the employee is traveling away from his or her home community and is a passenger traveling to another location.  How can this time be managed?  An employer may prohibit the employee from performing work while traveling (except for the event they are traveling for) – this would most often apply to skilled workers who are unlikely to do much if any work via a laptop or other device.

As for the majority however, those traveling are likely to have a laptop or other device for working remotely.  The employer can (and should) require the employee to record all hours worked and the times throughout the duration of the trip.  The employee needs to be paid for all hours worked, but could be disciplined for working during times he or she was told not to (but, obviously, the nature of the discipline cannot be deducting pay).

Can A Different Travel Wage Be Paid?

Minnesota employers may establish policies and practices whereby the employee’s hourly wage is different for travel time. However, in no event can the hourly wage be less than minimum wage – I know you all know this!  Keep in mind that overtime frequently applies in travel weeks, and so the regular rate would also change.  As a matter of employee relations, employers should consider making this a clear policy and at a minimum notify the employee of a differently hourly wage before the travel time is taken.

In short, employee travel will hopefully never be as exciting as the 1987 movie Planes, Trains & Automobiles, but it can be complicated nonetheless.  Flight delays, time changes, overtime, weekend double time, etc., all of these issues may come into play and should be considered and addressed when determining an employee’s travel time compensation.

24 HourWhile Jack Bauer may be by the wayside, Fox Network’s 24 is not going away any faster than an employer’s requirement to pay terminated Minnesota employees within 24 hours.  An issue that I frequently get calls about (usually somewhat frantic) is a terminated employee’s demand for payment within 24 hours. Unfortunately, too many employers without a dedicated HR professional (owner, accountant, office manager, CFO, etc.) are not aware of this quirky law and often get caught off guard when a former employee demands payment (wages and/or commissions – I’ll just use “wages” to be short) within 24 hours – often including disputed wages such as PTO, commissions, overtime and bonuses.

The so-called “Minnesota Prompt Payment Act” or the “Minnesota Payment of Wages Act”) (I say this because there is no official name so plaintiff attorneys call it the first while defense attorneys tend to call it the latter), Minn. Stat. 181.13-.14, states that employees who quit are entitled to their final pay at the next regular payroll, so long as it is not more than 20 days from the last date worked.  As with most wage and hour issues – there are always exceptions for employees covered by a collective bargaining agreement – I won’t go into that here, however.

Regardless, when an employer terminates an employee, the clock is ticking:

the wages or commissions actually earned and unpaid at the time of the discharge are immediately due and payable upon demand of the employee.”

This is easy enough right?  If Jack Bauer can save the world in 24 hours, certainly an employer can pay an employee within 24 hours right?  Unfortunately, if it were that easy, I wouldn’t feel a need to write this post.

If you know you are terminating an employee ahead of time such as in a RIF, restructuring, or following a failed PIP, it is often easiest and most efficient to present the employee with his or her final paycheck at the termination meeting – just be clear what the check covers (maybe detail it in the termination letter as they won’t remember much of the conversation).  All too often they don’t see PTO payout, etc. and then believe they can’t access the online payroll system and so they think they are being denied wages (and don’t think they can verify it themselves and thus the employer must be trying to cheat them out of wages).  If that is not possible, whether due to payroll issues or the termination being an on-the-spot discharge without warning, the employee must be paid those wages by the next payroll…unless they make a written demand in which case the employer has 24 hours to pay the employee the unpaid wages. Thus, the word “immediately” is really defined as “within 24 hours”.

How Will You Know If A Written Demand Has Been Made?

MNDOLI makes it very easy for employees to comply with the law – in fact, it provides on its website a sample letter for the employee to send to the employer.  The substance of that letter is below:

“Re: Demand for final payment of wages

Dear [Employer name]:

This is a demand for my final wages. My last day of work was [Last day of work]. I have worked and not been paid for [Number of hours] hours and I am owed [dollar-amount owed] at this time.

Under Minnesota Statutes § 181.13, I am entitled to receive all of my final wages within 24 hours of this demand. Please mail my final wages to the address listed below within 24 hours of your receipt of this letter.

Failure to provide final wages within 24 hours of this demand may result in a penalty of up to 15 days of additional wages.”

Note that while MNDOLI’s form provides for the employee to state the amount of hours worked and believed wages, I think I have only seen such specificity once.  While that information is sure handy to have, it is not required by the law.  Thus, pretty much anything in writing will suffice. Most often I see the following to an HR professional or supervisor: “Dear Joe, please pay me all my wages due and owing to me within 24 hours.”   Next, I get the frantic phone call.

What Should Employers Do After Receipt of a Demand for Wages?

As a lawyer for employers, it is very advantageous when a client sends us a demand (before anything is responded to).  Often we can tell based on the letter whether the former employee is represented by an attorney based on the wording – and often they will include mention of a statement of reasons for termination, or the “truthful” reasons for their termination.  Keep in mind that too is something they can ask for under the law and are entitled to.  In fact – if they ask for the trifecta – (1) wages; (2) personnel file; and (3) statement of reasons for termination, the chances are good they either have an attorney, or have been through this process with an attorney before and all kinds of red flags should be shooting up that there is a much bigger issue brewing. Using counsel to assist with this process can be very beneficial as often those documents and responses are what an employer is stuck with through the course of the upcoming dispute.

Back to wages.  If there are undisputed wages (i.e. you were just waiting for the next payroll), then payment should be made within 24 hours.  If you paid the employee all wages you believed were due, and still got a demand, it would be prudent to ask the employee for clarification of what he or she believes to be owed.  Sometimes it is just confusion over PTO, or payment of a bonus not earned because the employee was terminated before the bonus payout date.  Sometimes a quick clarification can save a lot of headache and wonder.

What If Final Wages Are Disputed?

Well, this rarely happens.  Kidding, of course.  If an employer disputes the amount of wages the employee claims to be due, and the employer pays the employee the disputed wages, the employer is not liable for any sum greater than that which the employer in good faith believes to be due – unless the employee recovers it in court.  If the terminated employee was entrusted with handling money, the employer has 10 calendar days to audit and adjust the accounts of the employee before they are due.  In reality, disputed wages get to be a very tricky issue and one I can’t just write the answer to, unfortunately, as the resolution and/or next steps are often fact specific.

What Deductions Can Be Made to Final Wages?

So, here’s another issue that comes up a lot – what can an employer withhold or deduct from a discharged employee?  The statute states:

No employer shall make any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer, except as permitted by section 181.79.

Well, now this topic is a whole other blawg (yes, this spelling is intended – I am told this is what lawyer’s “blogs” are artfully called), but for now, just keep that in mind.

How Can Final Wages Be Paid?

Probably the second question I get asked is how to actually effect the payment to the employee – can the employer direct deposit it?  Make the employee pick it up when the employee drops off the company’s laptop or cell phone?  Stick it in snail mail?  Wages must be paid to the terminated employee in the “usual manner of payment” unless the employee requests it be mailed – in which case the date of the postmark of the check is the effective date of payment.  Thus, unless instructed by the employee otherwise, just process it as usual.

What Happens If The Employee Was Not Paid Within 24 Hours of Demand?

It happens.  Whether someone thinks the former employee is just being difficult (not knowing about the law because the employer didn’t read this!), it got lost among departments, or payroll just couldn’t process it in time (your one payroll person being sick that day), there are always cracks to fall through.  In the case of “nonprompt payment”, the employer is liable for a penalty equal to one days’ pay for every day the payment is late – up to 15 days.  How is the former employee going to get this money and penalty?  The former employee may file a wage claim with MNDOLI or sue the employer in court – conciliation court (a.k.a. small claims court) if less than $15,000.

So, as you can see, this little quirky law has the potential for some headache, but nothing you can’t handle!

 

Construction workerQuick fun fact of the day – I recently learned that the Minnesota Department of Transportation’s OCIC – Labor Compliance Unit has resources to assist it to find compliance violations (employee misclassifications).  Apparently, MNDOT’s CRL (Civil Rights and Labor) payroll system flags key words from inspector’s field notes and searches for the proper classification in the CRL system.  For example, if the inspector enters in “dismantle commercial sign” any time in the week, the CRL system should have a “Sign Erector” classification for that week.  If not, the system will flag the District Office Manager before that certified payroll report can be approved.  Who knew?