Purpose of the Rules
1.1 These Rules govern the practices of the Department of Human Rights & Equal Economic Opportunity (“Department”) in administering the provisions of the Wage Theft Ordinance, Chapter 224A of Saint Paul Legislative Code (“Ordinance” or “Chapter”). These Rules have been promulgated pursuant to the authority listed in Saint Paul Legislative Code §224A.11 and §224A.12.
1.2 Nothing in these Rules will be interpreted or enforced in a way that conflicts with the Federal or State Fair Labor Standards Acts.
1.3 Severability. These Rules are independent and severable. If any part of these Rules is found to violate any law or found to be invalid or in conflict with the Ordinance, such finding must be limited as narrowly as possible, and all other parts of these Rules must be considered valid and in effect.
1.4 Liberal construction of rights, narrow construction of exemptions. Under Saint Paul Legislative Code § 224A, the purpose of the Ordinance is to promote the general welfare of the people the City, and the Department has the authority to investigate possible wage theft violations. Accordingly, these Rules will be liberally construed, with any exceptions or exemptions narrowly construed.
Definitions and Clarifications
These Rules incorporate all definitions codified in the Ordinance and use the following defined terms:
2.1 “City’s Minimum Wage Ordinance” means Title XXIII, Chapter 224 of the City of Saint Paul Legislative Code.
2.2 “Code” means the Legislative Code of the City of Saint Paul, Part II of the Saint Paul Code of Ordinances.
2.3 "Council” means the City Council of the City of Saint Paul.
2.4 “Independent Contractor” means an individual who provides goods or services but is not an Employee due to the nature of their work. See Minnesota Rules, Chapter 5224, Minn. Statutes §§ 181.723 and 176.043.
2.5 “Misclassification” means the practice by an Employer of not properly classifying workers as Employees.
2.6 “Ordinance” means Title XXIII, Chapter 224A of the City of Saint Paul Legislative Code, “Civil Wage Theft.” (See Saint Paul, Minnesota, Municipal Ordinance §224A.)
2.7 To “Perform Work” means, including but not limited to, training time, fulfilling regularly scheduled work hours, opening and closing, and breaks less than 20 minutes.
2.8 “Start of Employment” means the day employment activities begin. For example, the “Start of Employment” can include, but is not limited to, the Employee’s first day of training or performing job duties.
2.9 “Year” means a regular and consecutive 12-month period, either calendar or fiscal, as determined by an Employer and clearly communicated to each Employee of that Employer.
Employment in Saint Paul
General Rules about Covered Employees
3.1 The Ordinance covers all Employees, whether full-time, part-time, temporary, or some other designation, who perform work within the geographic boundaries of the City. (See Saint Paul, Minnesota, Municipal Ordinance §224A.03.)
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3.2 Unless specified in an agreement between an Employee and an Employer, time spent traveling to work before the Employee’s shift has started and traveling home after the Employee’s shift has ended are not covered by this Ordinance. (See Federal Fair Labor Standards Act.)
3.3 Employees are not covered by the Ordinance for hours worked outside the geographic boundaries of the City. (See Saint Paul, Minnesota, Municipal Ordinance §224A.03.)
Employees Working from Home
3.4 Employees working from home (or otherwise telecommuting) are covered by the Ordinance if the Employee is working within the geographic boundaries of the City. (See Saint Paul, Minnesota, Municipal Ordinance §224A.03.)
Employees Working Periodically in Or Traveling Through Saint Paul
3.5 Employees who do not regularly work in the City are covered by the Ordinance for hours worked within the geographic boundaries of the City if the Employee, over the course of one (1) week, performs at least two (2) hours of work for the Employer within the geographic boundaries of the City. (See Saint Paul, Minnesota, Municipal Ordinance §224A.03(b).)
3.6 Employees traveling through the City and only making incidental stops, such as changing a flat tire or stopping for gasoline, are not covered by the Ordinance in such situations. (See Saint Paul, Minnesota, Municipal Ordinance §224A.03.)
On-Call Employees
3.7 An Employee required to remain on the Employer's premises or so close to the premises that the Employee cannot use the time effectively for the Employee's own purposes is working while on call and must be paid the wage agreed to by the Employer and the Employee and can be at no times less than the applicable rate under the City’s Minimum Wage Ordinance. (See Minn. R. §5200.0120, sub 2.)
3.8 An Employee who is on-call and not required to remain on or near the Employer's premises while on-call but is required to leave word at the Employee's home and/or with company officials as to where they may be reached is not performing work. (See Minn. R. §5200.0120, sub 2.)
Staffing Agencies
3.9 An Employee placed by a staffing agency is an Employee of the staffing agency for purposes of the Ordinance unless there is an agreement providing otherwise.
Independent Contractors
3.10 Independent Contractors are not covered by the Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.02 definition of Employee.)
3.11 Individuals can sometimes be incorrectly classified as Independent Contractors, instead of as Employees. It is the Employer’s responsibility to classify their workers correctly.
3.12 Federal and State guidance can help determine whether a worker is an Independent Contractor or an Employee. An Employer or Employee can access the Independent Contractors test under the Federal Fair Labor Standards Act.
Salaried and Commission Based Employees
3.14 For Employees paid on commission, the base rate of pay is the same rate that the Employee receives per hour of work. In no case shall the Employee’s base rate be less than that provided under the City’s Minimum Wage Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.02.)
3.15 To calculate the base rate for salaried or 100% commission paid Employees, use the formula below:
Take the Employee’s total annual salary.
a. For Employees who earn 100% commission or are salaried, the total annual salary is the total wages paid to the Employee over a regular and consecutive 12-month period.
b. For Employees who earn 100% commission or are salaried, add together all the monthly earned wages since the Start of
Employment. Divide the total wages earned by the number of
months worked to get an average monthly wage. Multiply that
average monthly wage by 12 to get the annual salary.
Divide the annual salary amount by 52 weeks worked to determine the Employee’s weekly wage amount.
Divide the weekly wage amount by the number of hours in the Employee’s normal or average work week to determine the Employee’s hourly base rate.
Example: John earns $80,000 for an annual salary and is not paid by the hour. On average, John works 40 hours per week. His weekly salary is $1,538.46 ($80,000 / 52 = $1,538.46). If John’s normal work week is 40 hours, John’s standard base rate is $38.46 ($1,538.46 / 40 = $38.46).
3.16 For Employees whose rate of pay fluctuates within a single job title depending on what duties they are performing for the Employer, the base rate is the rate received per hour of work. In no case shall the Employee’s base rate be less than that provided under Saint Paul Legislative Code, Chapter 224.
Piece Rate Compensation
3.17 In no case shall an Employee’s hourly rate be less than that provided under City’s Minimum Wage Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224.)
3.18 If an Employee is paid on a piece rate basis, do the following to calculate the Employee’s hourly rate of pay:
Add together the Employee’s total earnings for the most recent workweek. This is the Employee’s total weekly earnings.
Divide the total weekly earnings by the number of hours worked during the most recent workweek. This is the Employee’s hourly rate.
Wage Theft Prohibited
4.1 An Employer must pay all wages earned by an Employee for work performed in the geographic boundaries of the City of Saint Paul. (See Saint Paul, Minnesota, Municipal Ordinance §224A.04(a).)
4.2 A regular payday must be identified in advance on an Employee Wage Notice and Employees must receive payment of wages on that date. (See Minn. Statutes §§181.10 and 181.101 and Saint Paul, Minnesota, Municipal Ordinance §224A.06.)
4.3 If the Employer has overpaid an Employee, the Employer must provide notice before withholding funds to recover the overpayment. (See Saint Paul, Minnesota, Municipal Ordinance §224A.04 (d).)
Example: Gerbert works for Tou’s Market and receives their wages every two (2) weeks. Upon receiving their pay stub, Gerbert notices that they were overpaid by five (5) hours. Gerbert notifies their employer. The Employer cannot deduct funds from the next paycheck without telling Gerbert what they plan to do to recover the overpayment.
Joint and Several Liability; Indemnification
General Rules about Joint and Several Liability
5.1 A main or primary contractor or client is ultimately responsible to ensure their subcontractors are following this Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.05.)
Collections
5.2 The Department must first attempt to collect any unpaid wages, interest, damages, and other penalties from the Employer alleged to have committed the violation before attempting to collect from a party that benefitted from the work. (See Saint Paul, Minnesota, Municipal Ordinance §224A.05(a).)
Example: General Contractor A contracts with Subcontractor B to perform certain work. Subcontractor B directly employs an Employee to do that work. If the Department finds that the Employee suffered wage theft, then the Department will first work to collect the Employee’s back wages from Subcontractor B before attempting to collect the wages from General Contractor A.
Notice to Joint and Severally Liable Parties
5.3 The Department must make a good-faith effort to identify all potentially joint and severally liable Employers during an investigation. Where the Department identifies potentially joint and severally liable Employers, the Department must provide a Notice of Investigation via U.S. Mail to that potentially liable Employer. The potentially joint and severally liable Employer has the same rights, responsibilities, and timelines to respond to a Notice of Investigation as the Employer that directly hired the Employee. (See Saint Paul, Minnesota, Municipal Ordinance §224A.05.)
Employee Wage Notice
6.1 An Employer must provide each Employee with an Employee Wage Notice by the Start of their Employment. This notice must include all the information required in this Chapter. (See Saint Paul, Minnesota, Municipal Ordinance §224A.06(a).)
6.2 The Employer must keep a record that is signed and dated by each Employee confirming that they have received the Employee Wage Notice by the Start of their Employment. (See Saint Paul, Minnesota, Municipal Ordinance §224A.06(c).)
6.3 Anytime an Employer changes information on the Employee Wage Notice, the Employer must notify Employees before the change takes place. The Employer must keep a record signed and dated by each Employee confirming that they received the change in information. (See Saint Paul, Minnesota, Municipal Ordinance §224A.06(d).)
Required Statement of Earnings
7.1 At the end of each pay period, an Employer must provide each Employee with an earnings statement covering that pay period. The earnings statement may be provided in writing or by electronic means. (See Saint Paul, Minnesota, Municipal Ordinance §224A.07(a).)
7.2 The earnings statement must include all the information required in this Chapter. (See Saint Paul, Minnesota, Municipal Ordinance §224A.07(a).)
7.3 When an Employee chooses to receive the earnings statement in writing, the Employer must comply with that request on an ongoing basis. However, the Employer may choose how best to comply with the request, such as sending the statement of earnings via U.S. Mail or handing out the statement of earnings to the Employee on a certain day and time. (See Saint Paul, Minnesota, Municipal Ordinance §224A.07(c).)
Employer Recordkeeping
8.1 Employer records must include all the information required in this Chapter. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08(a).)
Access to Records
8.2 Employers must, at a minimum, maintain all records and information required in this Chapter while an employee is employed and for a three (3) year period for all Employees and provide such information to the Department upon request. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08(b)(d).)
8.3 If an Employer refuses to provide the Department access to records to investigate potential violations or monitor compliance with the requirements of the Chapter, the Department may seek an administrative search warrant for such records. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08(d),(f).)
Failure to Provide Access to or Maintain Records
8.4 Once the Department notifies an Employer that an investigation under the Ordinance has begun, the Employer must not destroy any records until the Employer is notified by the Department that the investigation has ended. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08.)
8.5 An Employer's failure to maintain, retain, or produce a full response to the Department’s request for records, or any other information that is reasonably related to the investigation following the execution of an administrative search warrant for such records shall create a presumption that the Employer has violated this Chapter absent clear and convincing evidence otherwise. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08(g) and §224A.12(b)(2).)
8.6 When an Employer does not provide or maintain adequate records as mandated by the Ordinance and the Department orders backpay, the Department may make determinations of backpay wages based on available evidence. (See Saint Paul, Minnesota, Municipal Ordinance §224A.08(h).)
8.6.1 Available evidence shall include, but is not limited to contracts, documentation and testimony provided by Employees, documentation provided by the Employer, public documentation posted by the Employer, documentation provided by third-parties, and/or wage estimates by the U.S. Bureau of Labor Statistics and other federal or state agencies.
Notice and Posting
9.1 The Department has available a standard Workplace Notice Poster for Employers in five (5) different languages. (See Saint Paul, Minnesota, Municipal Ordinance §224A.09(a).)
9.2 An Employer must post the standard Workplace Notice Poster in a noticeable place, such as in a breakroom, by a punch clock, or at some common work meeting place where it can be seen by Employees. Employers may also put an electronic copy in an internet or electronic platform to satisfy physical posting requirements. The Workplace Notice Poster must be in English, and the primary language of Employees as identified by the Employees. (See Saint Paul, Minnesota, Municipal Ordinance §224A.09(b).)
9.3 Employers must notify their Employees every year about their rights under this Chapter. (See Saint Paul, Minnesota, Municipal Ordinance §224A.09(c).)
9.4 An Employer that provides an Employee handbook to its Employees must include notice of Employee rights under the Ordinance in the handbook. Employers can satisfy this requirement by including the Department’s Workplace Notice Poster in their Employee handbook. (See Saint Paul, Minnesota, Municipal Ordinance §224A.09(d).)
Employer Succession
10.1 When a different Employer succeeds or takes the place of an existing Employer, the original Employer remains liable for all wages owed to Employees up to the time of transfer of the business to the successor Employer. (See Saint Paul, Minnesota, Municipal Ordinance §224A.10(a).)
10.2 If there is an open wage theft investigation with the Department, the original Employer must notify the Department 30 days before a sale or transfer of the business. (See Saint Paul, Minnesota, Municipal Ordinance §224A.10(b).)
10.3 A successor Employer must provide Employees with an Employee Wage Notice at the time of sale or acquisition, or as soon as practicable, which must comply with the Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.10(c).)
Implementation
11.1 The authority of the Director and Department to implement, administer, and enforce this Chapter is clearly established and outlined in Saint Paul Legislative Code § 224A. (See Saint Paul, Minnesota, Municipal Ordinance §224A.11.)
11.2 The Department will develop and implement culturally specific outreach to educate Employees and Employers about their rights and obligations under this Chapter. Upon the request of Employers or Employees and at times agreed upon by the Department, the Department will provide educational presentations to Employees and Employers on the Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.11.)
Investigation and Enforcement
Time Limitations
12.1 Any person alleging a violation of the Ordinance has the right to file a complaint with the Department within two (2) years of the alleged violation. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(a).)
Data
12.2 Per City of Saint Paul Administrative Code § 11.03(d) the Department will only reveal complainant information as required by law. The Department will, to the extent practicable, notify complainants that the Department will be disclosing their identity prior to such disclosure. The Minnesota Government Data Practices Act governs the data provided to the Department.
Investigation Process
12.3 The Department may investigate and resolve complaints. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(b).)
12.4 The Department begins an investigation when a complaint is received by sending a Notice of Investigation to the Employer that sets forth the allegations and pertinent facts. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(b).)
12.5 The Department may amend and resend the Notice of Investigation to the Employer at any point in the investigation.
12.6 Within seven (7) days of receiving a Notice of Investigation, the Employer must post a form in a physical or electronic format to alert Employees of the investigation. The form will be sent to the Employer by the Department along with the Notice of Investigation. The form must remain posted until the case is closed and the Department confirms the Employer is in compliance. The Employer must send a photo of where the notice has been posted to the Department within seven (7) days of posting. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(b)(1).)
12.7 The Employer can choose to provide a written response, either via U.S. Mail, fax or e-mail to specify their position. If the Employer admits to violating the Ordinance, they must include in their position how they will remedy the violation. If the Employer denies the allegations, they must specifically state how the Employer is in compliance with the Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(b)(2).)
12.8 The Employer may request additional time to submit the written response to the Notice of Investigation or any other request made by the Department. Such a request should include the amount of time requested and the reason that the Employer cannot respond within the original time allowed. The Department’s grant or denial of this request is not appealable.
12.9 The Employer and the Department may enter an informal mediation process at any time during the investigation. This process is an opportunity for the parties to negotiate a settlement and resolve the matter. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(b).)
12.10 If a pre-determination settlement is not reached, the Department will continue the investigation and issue a Determination of Violation or Determination of No Violation based on a preponderance of the evidence. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(c).)
Determination of Violation or No Violation
12.11 The Determination will be sent to the complainant who filed the complaint and the Employer via either U.S. Mail, fax, or e-mail. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(c) and §224A.12(e).)
12.12 If the Department issues a Determination of No Violation, the complainant may ask for a reconsideration or bring a civil action in district court. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(c) and §224A.12(d).)
12.13 If the Department issues a Determination of Violation and the Employer denies the allegation, they have the right to present evidence to a Hearing Examiner. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(e).)
12.14 The Hearing Examiner will present the written findings to the City Council, who will uphold or overturn the finding based on the evidence in the record. There is no opportunity for the Employer to submit new evidence at this point. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(f) and §224A.12(g).)
13. Remedies and Relief
13.1 The Employer and the Employee may, with the approval of the Department, agree to a resolution or remedy, such as financial compensation. (See Saint Paul, Minnesota, Municipal Ordinance §224A.13(a).)
13.2 The Department may order financial compensation and public interest terms. Public interest terms include, but are not limited to, policy corrections, Employee training, and compliance reporting. (See Saint Paul, Minnesota, Municipal Ordinance §224A.13(a).)
13.3 Reasonable interest on ordered financial compensation begins to accrue from the date of a Determination of Violation until all ordered financial compensation is paid. Reasonable interest is the annual interest rate set by the state court administrator pursuant to Minnesota Statutes § 549.09(c)(1).
13.4 The Department may order the debarment of any Employer who contracts with the City who is found to be in violation of the Ordinance two (2) or more times in a three (3) year period. (See Saint Paul, Minnesota, Municipal Ordinance §224A.13(a)(4).)
13.5 The Department may publish the List of Outstanding Violations on the City of Saint Paul’s website. Employers will be placed on this list until all remedies and relief have been paid in full and verified with the Department. (See Saint Paul, Minnesota, Municipal Ordinance §224A.13(a)(5).)
Retaliation
14.1 Any person who complains to or communicates with the Department regarding wage theft violations either verbally or in writing is protected from retaliation under this Chapter regardless of whether they reference the Chapter or not. (See Saint Paul, Minnesota, Municipal Ordinance §224A.14(a).)
14.2 Employers may not retaliate against any Employee for exercising any rights under the Ordinance. Employers also may not interfere with Employee rights under the Ordinance. (See Saint Paul, Minnesota, Municipal Ordinance §224A.14(b).)
Examples of retaliation include, but are not limited to, the following: termination, suspension, revocation of benefits, demotion, transfer to a different location, job reassignment, pay decrease, loss of hours or threats to report a person to immigration authorities.
14.3 It is a rebuttable presumption of retaliation if an Employer or any of their other employees disciplines, discharges, penalizes, interferes with, threatens, restrains, coerces, or otherwise retaliates or discriminates against an Employee within 90 days of inquiring about or filing a complaint with the Department. (See Saint Paul, Minnesota, Municipal Ordinance §224A.14(d).)
14.4 Employees may file a lawsuit in district court if they allege that their Employer interfered with their rights as outlined in the Ordinance. An Employee or other person who has reported a violation of this Chapter may:
14.4.1 Bring a civil action in district court within 45 days after receipt of a notice of Determination of No Violation of this Chapter. Notice is presumed to be five (5) days from the date of service by U.S. Mail of the written notice. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(c).)
14.4.2 Bring a civil action in district court within 45 days upon notice that the Director has reaffirmed a Determination of No Violation of this Chapter if the complainant requested reconsideration. Notice is presumed to be five (5) days from the date of service by U.S. Mail of the written notice. (See Saint Paul, Minnesota, Municipal Ordinance §224A.12(c).)
