Attorney General Keith Ellison, Minnesota lawmakers look to crack down on wage theft

Nely Bautista found herself the victim of an increasingly worrisome type of theft in the Twin Cities when an employer refused to pay her for a two-week gig cleaning apartments.

State officials who promise to crack down say the 43-year-old Savage woman is one of tens of thousands of Minnesotans who fall prey each year to wage theft when employers withhold money earned on the job.

Now, state lawmakers are trying to make it a crime, and Attorney General Keith Ellison is creating a new labor division to broaden the office's prosecutorial power to address economic crimes. "When you ask yourself how do we get such massive inequality in our country, it's not just because of huge tax cuts for the rich like we passed last year," Ellison said, citing the 2017 Republican tax cuts. "It's also working people not getting what they've even been promised at all. Before we ever talk about raising the minimum wage to this or that, let's talk about getting all the wages people are already due and owed."

The Department of Labor and Industry estimates that roughly 39,000 Minnesotans miss out each year on nearly $12 million from employers who do not compensate them for their work — including failing to pay overtime, misclassifying employees as independent contractors or, in Bautista's case, declining to cut workers a check at all.

Some, including immigrants here illegally, are reluctant to fight back.

Bautista, who fled from Mexico six years ago, said she struggled with the idea of confronting her Minnesota employer in 2017 even as she desperately needed the money to pay rent and buy food.

"But I decided to confront myself and not let this continue happening because I realize this is happening to a lot of people besides me," Bautista said, speaking in Spanish through an interpreter.

Nancy Leppink, who recently returned to Minnesota to lead the department, said people living in the U.S. illegally are particularly vulnerable, as are workers in industries like construction and hospitality. Newer forms of work, like the app-based "platform economy" of food delivery and other services also are increasingly vulnerable.

The department processed a record 1,363 wage claims last year and recovered more than $1.1 million in earned wages and back pay. But labor officials warned that they are unable to investigate every complaint. The agency is now seeking to add seven new investigators.

Leppink is in regular contact with Ellison, who is expected to post job openings for what will be one of about a half-dozen labor divisions opened by state attorneys general in the country.

"Having a prominent leader in the state really taking this on is sending a message to workers that these are your rights, we're going to protect them, and it's sending a message to employers that these are your obligations and there will be consequences if you don't take them seriously," said Terri Gerstein, director of the State and Local Enforcement Project at Harvard Law School. Gerstein recently traveled to Minnesota to advise Ellison on creating a labor unit.

State lawmakers from both parties also are pushing new measures to criminalize wage theft in Minnesota, toughen record-keeping requirements for employers and give the state Labor Department subpoena powers to gather documents from uncooperative employers accused of wage theft.

But some business groups have urged caution.

The Minnesota Chamber of Commerce has objected that the legislative measures don't go far enough in requiring proof of intent among employers to deny workers pay, suggesting that smaller employers with less-sophisticated payroll systems could run afoul of the law because of inadvertent payroll errors.

One Senate bill would require employees to first file written complaints with their employers before the Labor Department could start its own investigation.

"We just want to make sure we're not creating criminals out of honest, hardworking folks," said Sen. Eric Pratt, R-Prior Lake, the bill's chief sponsor.

But Leppink has called the requirement a "significant disincentive" against seeking help because of the fear of retaliation. She said it would also give bad actors time to doctor records or coach witnesses.

Bautista, who now works in construction, said she decided to overcome her own fear of confronting her boss over the $390 she said she was owed because she also felt a responsibility for the five other workers her boss had asked her to recruit for the job. They also weren't paid, she said. She found the Centro de Trabajadores Unidos en la Lucha, a labor advocacy group in Minneapolis, which helped draft a demand letter that eventually persuaded the boss to send her a check.

"Before, because of my fears, I didn't want to confront these things," Bautista said. "But now I realize that a lot of people are going through the same thing."

Stephen Montemayor • 612-673-1755 Twitter: @smontemayor