ISSUES SURROUNDING BACK-WAGES
- Whether an employee has a right to unpaid wages within a particular number of days after termination of employment.
- Whether an option easier than court is available for collection of wages.
- Yes. An employee has a right to be paid at least once per month.
- Yes. The Commissioner of Labor and Industry may pursue a claim if the employee remains in employment with the employer. After the employment has ended, the only option is filing in Small Claims Court or district court.
A client is working for an employer that is not making its payroll. The employer missed eleven of fifty-two paychecks equaling $1,000 per check in calendar year 2004, which resulted in debt to the client of $11,000. For calendar year 2005, the employer has not paid the client nine additional checks. In total, the company now owes the client $20,000.
Employee’s Right to Wages
An employee has a right to receive earned wages at least once every thirty-one days. This right is provided by the Minnesota Statutes:
Every employer must pay all wages earned by an employee at least once every thirty-one days on a regular pay day designated in advance by the employer regardless of whether the employee requests payment at longer intervals. Unless paid earlier, the wages earned during the first half of the first 31-day pay period become due on the first regular payday following the first day of work.
Minn. Stat. § 181.101 (2005)
The payment of wages is enforced by the Minnesota Commissioner of Labor and Industry:
If wages earned are not paid, the commissioner of labor and industry or the commissioner’s representative may demand payment on behalf of an employee. If payment is not made within ten days of demand, the commissioner may charge and collect the wages earned and a penalty in the amount of the employee’s average daily earnings at the rate agreed upon in the contract of employment, not exceeding 15 days in all, for each day beyond the ten-day limit following the demand. Money collected by the commissioner must be paid to the employee concerned.
The Minnesota Commissioner of Labor and Industry will not enforce payment of wages by a former employer. Telephone Interview with a Staff Member at the Minnesota Labor and Industry (August 3, 2005). Such wages must be pursued in Small Claims Court or district court. See id. Thus, an employee currently working for an employer should request the Commissioner’s enforcement before resigning from employment. See id.
An employer that fails to pay an employee may be subject to a penalty in the amount of the employee’s average daily wage amount:
When any employer employing labor within this state discharges an employee, the wages or commissions actually earned and unpaid at the time of the discharge are immediately due and payable upon demand of the employee. If the employee’s earned wages and commissions are not paid within 24 hours after demand, whether the employment was by the day, hour, week, month, or piece or by commissions, the employer is in default. The discharged employee may charge and collect the amount of the employee’s average daily earnings at the rate agreed upon in the contract of employment, for each day up to 15 days, that the employer is in default, until full payment or other settlement, satisfactory to the discharged employee, is made. In the case of a public employer where approval of expenditures by a governing board is required, the 24-hour period for payment does not commence until the date of the first regular or special meeting of the governing board following discharge of the employee.
[W]ages and commissions are paid as of the date of their postmark.
Minn. Stat. § 181.13 subd. (a)-(b) (2005).
The process for requesting the Minnesota Commissioner of Labor and Industry to “demand payment on behalf of an employee” under Minnesota Statutes section 181.101 is done by sending a letter to the Commissioner. Telephone Interview with a Staff Member at the Minnesota Labor and Industry (August 3, 2005). The Commissioner may send a letter to the employer demanding payment. If the employer fails to respond or make payment, the employee has the option to continue to matter by filing in Small Claims Court or district court. However, the employee’s claim of $20,000 exceeds the maximum allowed for Small Claims Court.Employee’s Right to
Wages after Employment End
An employee has a right to receive earned wages after employment is ended. This right is provided by the Minnesota Statutes:
When any such employee quits or resigns employment, the wages or commissions earned and unpaid at the time the employee quits or resigns shall be paid in full not later than the first regularly scheduled payday following the employee’s final day of employment, unless an employee is subject to a collective bargaining agreement with a different provision. If the first regularly scheduled payday is less than five calendar days following the employee’s final day of employment, full payment may be delayed until the second regularly scheduled payday but shall not exceed a total of 20 calendar days following the employee’s final day of employment.
Minn. Stat. § 181.14 (2005) subd. 1(a).
An employer’s failure to make timely payment will result in a daily penalty owed to the employee. This penalty is provided by the Minnesota Statutes:
Wages or commissions not paid within the required time period shall become immediately payable upon the demand of the employee. If the employee’s earned wages or commissions are not paid within 24 hours after the demand, the employer shall be liable to the employee for an additional sum equal to the amount of the employee’s average daily earnings provided in the contract of employment, for every day, not exceeding 15 days in all, until such payment or other settlement satisfactory to the employee is made.
Minn. Stat. § 181.14 subd. 2 (2005).
An employee also has a right to sue the employer in court. This right is provided by the Minnesota Statutes:
Subdivision 1. Civil action; damages. A person may bring a civil action seeking redress for violations of sections 181.02, 181.03, 181.031, 181.032, 181.08, 181.09, 181.10, 181.101, 181.11, 181.12, 181.13, 181.14, 181.145, and 181.15 directly to district court. An employer who is found to have violated the above sections is liable to the aggrieved party for the civil penalties or damages provided for in the section violated. An employer who is found to have violated the above sections shall also be liable for compensatory damages and other appropriate relief including but not limited to injunctive relief.
Subdivision 2. District court jurisdiction. An action brought under subdivision 1 may be filed in the district court of the county wherein a violation is alleged to have been committed, where the respondent resides or has a principal place of business, or any other court of competent jurisdiction.
Subdivision 3. Attorney’s fees and costs. In an action brought under subdivision 1, the court shall order an employer who is found to have committed a violation to pay to the aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.
Subdivision 4. Employer; definition. “Employer” means any person having one or more employees in Minnesota and includes the state and any political subdivision of the state. This definition applies to this section and sections 181.02, 181.03, 181.031, 181.032, 181.06, 181.063, 181.10, 181.101, 181.13, 181.14, and 181.16.
Minn. Stat. § 181.171 subd. 1-4 (2005).
Public Service Corporations and Jobs at Various Locations
Employers that are public service corporations are subject to other sections of the Minnesota Statutes not included here. See Minn. Stat. § 181.08 to .09. Likewise, the Minnesota Statutes include additional provisions related to employing any person to labor or perform service on any project of a transitory nature, such as the construction, paving, repair, or maintenance of roads or highways, sewers or ditches, clearing land, or the production of forest products or any other work that requires the employee to change the employee’s place of abode. See Minn. Stat. § 181.10 to .11.
CONCLUSION AND RECOMMENDATION
An employee has a right to payment of wages within one month after they were earned. An employee owed back-wages may file a claim in court or request the Minnesota Commissioner of Labor and Industry demand payment from the employer. After employment has ended, a person may enforce payment of back-wages from a former employer only by filing a claim in court. An employee’s claim may qualify to be filed in Small Claims Court, which should be a relatively inexpensive option. However, the client’s claim for $20,000 exceeds the maximum allowed for Small Claims Court.