Preventing Wage Theft

The Senate Jobs and Economic Growth Committee dedicated a hearing Tuesday, April 18, to review a proposal, SF 1329, designed to curb wage theft in Minnesota.

According to bill sponsor Senator Bobby Joe Champion, DFL-Minneapolis, about 39,000 workers in Minnesota every year have their wages stolen from them. He explained that wage theft occurs when employers fail to pay employees for work performed. Examples he cited include when an employer violates minimum wage, prevailing wage or overtime protections; an employer makes unlawful pay check deductions; an employer forces employees to work off-the-clock; an employer classifies employees as independent contractors to avoid paying workers compensation and unemployment insurance.

To address the issue, Champion's proposal would ensure that workers know by whom they are employed and when they will work and be paid. It also raises penalties for wage theft.

Proponents of the measure, mainly workers who experienced wage theft, spoke of the harm brought to their families. Shawn Larson, who is a minority owner of a Shakopee-based construction company, said, "In the construction industry, it is a well-known fact that there are companies that skirt the laws in order to improve bottom lines." He cited examples of companies paying cash, refusing overtime, and "sometimes flat out not paying their employees."

Cam Winston of the Minnesota Chamber of Commerce said that "wage theft is terrible." However, he said, the bill should not become law. "There are so many burdens put on good businesses that are doing the right thing, that are paying their employees, that we don't think this bill is good policy," he said.