Businesses across the world are experiencing unprecedented operational challenges, from adjusting to new regulations to just trying to keep their business afloat during a global pandemic.
However, it is critical to understand that extraordinary circumstances do not excuse certain legal infractions. For instance, no matter how much your business may be struggling, it is never a good idea to engage in wage theft.
What is wage theft?
Wage theft is a term that means wrongfully withholding wages from employees. There are various ways this can occur.
Employers can face wage theft accusations if they are:
- Misclassifying workers, which can affect tax obligations and overtime eligibility
- Failing to pay workers minimum wage
- Having employees complete work when they are off the clock
- Taking improper deductions from a person’s paycheck
- Failing to compensate employees for all the hours worked
All of these actions can result in legal action from an employee, as well as criminal charges in Minnesota.
Avoiding theft allegations
In order to avoid the myriad consequences of engaging in wage theft, employers must take precautions.
Such precautions include:
- Keeping detailed, accurate employee records
- Having proper time tracking and clock-in systems in place
- Establishing hours and rates at the start of any worker’s employment
- Ensuring workers are correctly classified as exempt or non-exempt employees, contractors or freelancers
These measures can keep employers in compliance with state and federal wage laws.
Theft in the time of coronavirus
Unfortunately, the fact is that wage theft practices have reportedly increased during the pandemic. As a recent New York Times article notes, even some businesses that have always complied with wage regulations in the past are committing violations for the first time.
Some employers are doing so because they assume workers will not push back during a time of economic strain and high unemployment; others are not paying employees properly because they feel they cannot afford to.
However, no matter what the reason, wage theft is unlawful and can have costly consequences. As such, Minnesota business owners should make every effort to comply with wage laws and consult an attorney right away if faced with allegations of theft or other employment violations.