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[Music] call this hearing of the senate labor policy committee to order today is wednesday february 24th 2021 uh a quorum is present we have one bill on the agenda today uh senate file 919 and uh i guess i will move the bills so that we have it before us uh senator pratt to senate file 919. well thank you mr chair and and uh i appreciate everybody being here so early uh members senate file 919 is a bill i've been working on for about a year uh i was really proud to off author uh bipartisan and nation-leading wage theft reform back in 2019 and you know what made that really happen was that we had uh we came together on some common values and and most notably that uh if someone earns a wage they should be paid what they earn now believe it or not prior to our our statute it was only a civil penalty if if you were stealing somebody's wages and the bill we created the definition of wage theft that was common across the entire state we made it a crime for the first time in fact we made it a felony if you were intentionally defrauding your employees and we created what we hoped would be clear expectations of what employees could expect but really shortly after the bill was uh became effective we started hearing concerns from uh employers good employers that the guidance and the ambiguity in the statute was making it hard for good employers like we'll hear from today uh to comply with the law i connected with the former commissioner of labor um we met with business owners and um after several months some changes were made to the guidance uh that the department of labor put out um but i think there's still some things that we need to clean up so the purpose of senate file 919 is is really two-fold one no statutes ever perfect coming out the door and we want to make some changes so that it's we're not reducing any of the worker protections that we have but we are uh making it easier to comply for good employers to comply and with that we are codifying some of the changes that uh have been enacted by the department of labor so members i'll just walk through the bill very very quickly um one of the one of the issue one of the first issues we heard about was we put into a uh into statute that you had to provide a wage theft notice with certain criteria on it prior to somebody starting their their position and you know having worked in corporate america i was used to getting offer letters um eric we're looking forward to you starting on october 1st um here's what we agreed to uh see you then well that works fine in in some cases but in many cases we're hiring people that are working off-site away from the hr group it wasn't always reasonable that you could get those notices done actually before they start so what we're trying to do in in this senate file is create a little bit of of leeway in fact you know a lot of the forms that are required for employment are done after somebody starts their job and so we wanted a milestone to shoot for so we just said that you know they had to have this signed form by uh the time they get their first pay invoice and we're clarifying what the department's already uh enacted and that's that the signature can either be uh in writing or electronic and that was one of the first pieces that uh became a real problem so now someone can acknowledge receipt of the wage theft notice uh over um another issue that came up was um we wanted to make somebody could be working multiple different doing different tasks throughout the day and maybe each task has a different uh pay rate associated with it um so what this bill does is requires the initial notice to include any pay schedule or range of pay for an employee who moves between duties um and makes makes it clear what those those different job classifications are that was missing in the original bill um we want to include a check box for temporary employees and i believe mr hill will be talking about uh the challenges that temp employees are or temp employers are facing uh one of the one of the other concerns that came up was minnesota's and at will employment state and the um the signing of the notice uh some felt became an employment contract and so what we wanted to do was make sure that uh in statute the signature or acknowledgement of that wage theft notice was not a contract but simply an acknowledgment of receipt um we also are allowing additional items to be substituted for the wage theft notice uh collective bargaining agreements uh is one and i worked uh i was on a school board and i know that uh our teachers contracts well in fact all of our contracts were very specific in the wages paid the amount of time off everything that's included in the wage death notice by receiving the cba or the handbook or a combination of documents as long as everything is covered those can be substituted for the actual wage theft form the other the other piece was that you only had to sign it when you came into the job for the first time and then changes just had to be notified the example i used was when i was with the u.s bank corp we went from 24 to 26 pay periods and um instead of having all of us sign a form saying yes i acknowledge we're going from 24 to 26 pay periods um we were able to do that through email and through the corporate website and so this just acknowledges that changes in pay don't necessarily have to be accepted on a wage step notice that they can be communicated either in writing or electronically and i had a grocery store owner he hired a 16 year old to work in his grocery store and the kid was doing a great job he gave him six raises in nine months but it was burdensome because he felt like he had to have this kid sign a new wage that form every time he gave him a raise and that just really wasn't the case or the intent of the law um we wanted to make sure that it was for wages and not discretionary pay for not for not for bonuses um that aren't tied to performance so uh you know if you get an annual bonus and it's discretionary upon the employer if you get a holiday bonus um those don't have to be disclosed via wage step um we've got some changes to uh staffing agencies that it's not required that the employee that's employed by a staff at the agency have to sign a new wage theft form for every placement and um one of one of the pieces we really wanted to do was 99 of our employers are good employers they treat their their their staffs well in fact i think what you'll hear from some of our folks is is that the people that work for them are like family and what we didn't want to do was have uh penalties coming down for an administrative mistake uh so what what this uh what this does on on page four is that if there's a mistake on the wage theft notice the first instance is a warning if someone is repeatedly making mistakes or intentionally making mistakes they'll be picked up on the second or third test but we want to give employers a chance to uh rectify uh any any mis uh misconceptions with with the wage theft notice and then uh finally uh historically we've allowed for back wages and penalties to be collected if someone's not paid within 10 days of demand uh the wages and penalties were capped at 15 days of of pay that was removed in 2019 and what we found is that in in quite honestly the commissioner will probably tell you that uh that was that wasn't enough encouragement for some of these bad employers to pay back wages that were in dispute but by taking out that 15-day notice what we've created is an unlimited penalty and no incentive on the employee to come together and find that common ground so we're just uh reinstating the uh previous standard that was in statute for you know many many decades uh to make sure that there's a cap on the on the penalties that can be put on an employer when there's a dispute uh mr chair i believe that is the bill in summary uh i'd like to i'd like you to uh you know why don't we go through the testifiers and i'll be happy to answer any questions yeah thank you uh senator pratt and yes members uh we will go through the list of testifiers we ask testifiers to hang around and then once everyone is complete then we will get to member questions so our first testifier is commissioner robertson from department of labor and industry actually chair i i believe that i will be testifying today oh all right so we'll have uh nicole call the listen doc yes that's correct all right identify yourself for the record please and uh go ahead with your testimony sure thank you chair members of the committee my name is nicole blissenbach i'm the deputy commissioner at the department of labor and industry um i will keep my comments short today um i i just want to share that the department has been in contact with the chair about this bill um we are walking through and the department is open to making it easier for employers to um comply with the notice requirements in the bill as long as it does not adversely affect the rights that were provided to employees when the initial wage theft bill was passed as i said we've met with the author we're open to some of the revisions some of them in fact as senator pratt noted are revisions that do put into law the interpretations that the department already is making based on the current language in the um in the employee notice provisions of the wage theft law well we do have some concerns about the bill again we are are willing to talk those through i believe we've had some good discussions already and um as i said the ultimate goal is if we can make it easier for employers to comply with the notice provisions without um taking away some of those protections that were established for employees then the department is willing to continue on with those discussions but we wanted to share that with the committee today thank you very much our next testifier will be justin terch please identify yourself for the record and begin with your testimony all right well uh first thank you for inviting me my name is justin terch i'm a volunteer uh legislative director with the minnesota society of human resource management um which is the i believe if not the one of the world's largest professional associations we have about 300 000 members that pay dues every year in the world and here in minnesota we have a few thousand hr professionals that we represent um as a as a coincidence it looks like the chair i'm a resident of the chairs district and i am my business office is downtown duluth which i believe is in senator mcewen's district so i didn't realize both of you are on the committee let alone uh in the positions you're at so this is kind of a treat for me but um i had the opportunity to read the revisions of the bill we've heard a lot of concern from our members about the original wage theft act um hr people as i'm sure you know i always say we're about as popular as a meter maid sometimes you know we uh where the where the we meet employees on the happiest day of their job when they start and on the some of the key milestones and sometimes on the saddest day of their employment and um we have to hold uh not just the um staff accountable when things happen in the workplace but the one of the hardest jobs is holding management accountable to make sure that we have a a fair workplace that's respectful and so minterm is supportive of the minnesota wage theft act you know we are opposed to financial exploitation of employees we want a fair playing field for all employers and so the spirit of that statute we're very supportive of and um glad for what we did find though is that there were some provisions of of that act which you're aware of that created a bureaucracy we didn't see coming and um that might be in the form of having written documentation i see that this the amendments that are being proposed allow for explicitly allow for electronic uh disclosure we also found that it was duplicative in many cases whether it was a collective bargaining agreement or the offer letters that are written by employers or you know the employee handbook that we were just duplicating additional information and we were creating another rung that we had we had to jump through we also heard from employers that hire employees rather quickly i've had i've had the opportunity i was the hr director of the public school district for a number of years and sometimes you're you know it's friday night and we need somebody to you know run the concession stand at the football game or we need a parent um who signed up to supervise some sort of an event with kids and it became a problem we had to rely on staff and oftentimes salaried staff to fill those roles because we couldn't get um the wage theft act notice done in time whereas normally even the federal immigration form the i-9 we have a certain amount of time after employment to have that completed and that's you know that's very heavily enforced so so i think we're really supportive as a society and as a a community of professionals for the protections for workers but we also see that there's a lot of need for for work you can reference the letter uh that i submitted on behalf of mnsherm uh for the record that may uh may enlighten you a little bit on some of our thoughts but uh overall we're really happy to see that we clarify that this is not an employment contract now that it doesn't change the at will relationship if that's the relationship that exists obviously if they're in a union or they have some other contract it wouldn't um it clarifies the that you know that uh that electronic uh disclosure electronic notification is acceptable it gives us a little bit of time to get that form done if we do have to hire in a quote-unquote emergency um and then um you know i think another real important aspect is for many of you as senators the majority of your employers in your district are not employers that have the ability to hire me hr people are not cheap i'm an hr consultant and you know really unless they have 30 or 40 employees they usually can't afford to hire somebody that has my knowledge and so a lot of our uh employers in our community are mom and pops they run little stores and they run little bars and restaurants and little boutiques and um i can tell you just honestly that they don't have the knowledge of the law and the rules that somebody in a position like me or one of my colleagues in hr might have and so the provision that allows for a fair warning to give an employer an opportunity to educate themselves about the the law and about the rules among all the hundreds of others that they have to really allows them an opportunity to be for this lot to be educational versus you know punitive when it wasn't an intentional violation and so i really um i really hope that you'll give this particular statute this particular bill thoughtful consideration and i thank you for your time today thank you mr church uh we will go next to uh lauren shot horst and adam hansen will be on deck mrs shot horse please identify yourself for the record and begin with your testimony good morning mr chair and members of the committee my name is lauren schothorst and i'm the director of workplace management and workforce development policy at the minnesota chamber of commerce as you know the minnesota chamber is a statewide organization representing more than 6 300 businesses of all types and sizes and more than half a million employees throughout minnesota the majority of our members are small and mid-sized businesses to reiterate very clearly at the beginning of my remarks what i said during the development of the wage theft law last legislative session we do not support condone or approve of wage theft as a business practice the message we carried as policymakers considered the best approach to legislating on wage theft was to make sure that caution was exercised so that those willfully engaging in labor trafficking or other such practices were not protected by ineffective laws and so that employers who were inadvertently found in some violation of certain wage laws were not considered to be such criminals in other words when the legislation was being debated last session we heard that it was targeted at the less than one percent of bad actors who intentionally withhold wages from employees and that was a direct figur used by the bill's author last session in the house but this law affects 100 of employers 99 of whom were already doing it right in a way that worked for their operations and employees and was set up to their hr practices and software if they could even afford software systems now those good employers run an unnecessary risk that any error created by some of the redundant duplicative or unless unnecessary new requirements could subject them to the law's very serious penalties so i'll just gently challenge justin justin's previous testimony that we didn't see this bureaucracy coming as you may recall the law was hastily enacted the timeline for implementation was entirely too fast and the rollout was plagued by the department at the times confusing inconsistent and sometimes incorrect guidance issued in speaking with many businesses and their employees members of all sizes experienced significant administrative implementation and compliance challenges with the state's new law as one employee who works for one of our members with 1600 employees in minnesota and 24 employees and other locations stated we've always taken pride in providing our employees with correct pay and wages this law is unnecessarily burdensome for employers who have always done the right and continue to do the right thing the implementation and ongoing administration of the requirements of this law have been overwhelming for our employees within our payroll and hr teams our hris platform does not have the ability to easily create the employee wage theft notices electronically so we have been required to pull in administrative assistance from the multiple departments to assist with the manual creation distribution and tracking of the notices we've had a standard process in place for a number of years to ensure our employees are notified of their pay upon hire as well as wage changes throughout their employment we work hard to make sure our employees are paid correctly via timekeeping data entry and audit reports so the introduction of the notices has created duplication and efforts and has become unnecessary and burdensome and then the coronavirus pandemic hit ushering in an entirely new set of hr management challenges before a full understanding of the wages of law was able to fully take hold so we're here today to thank the committee and senator pratt and the department for everyone's willingness to consider a few minor and reasonable ways to make compliance with the new wage theft law less costly and confusing for employers in minnesota while still keeping with the spirit of the law's original intention thank you mr chair for the opportunity to share our support for these efforts today thank you miss shotrust on deck will be todd hill but next mr hanson will you please identify yourself and begin your testimony thank you mr chair and members my name is adam hansen i'm with the associated builders and contractors of minnesota our contractor members and the men and women they employ are part of the 80 of the construction industry in the state that choose to be merit shop craft professionals they build our schools our medical facilities restaurant and retail establishments multi-family housing clean energy projects like solar and wind we want to thank senator pratt for his work on this bill which makes several important changes that we heard earlier while still leaving in place to protection for minnesota workers to ensure that they get paid promptly and what they're owed but also to ensure that contractors are all playing by the same set of rules i agree with a lot of the same points that mr church and shot horse testified previously as to why these much-needed tweaks are in the bill today and why we support them the bill does address a few issues that impact the construction industry that many of our members were unsure about in the in the previous year and a half or two for our members who employ multi-skilled craft professionals and who work on state-funded prevailing wage projects the changes beginning on line 2.19 allowing employers to list a pay schedule or a range of pay for employees who move between those job classifications is very important it's not uncommon for these employees to work in several different labor classifications on a job sometimes multiple in the same day when you combine these scenarios with the fact that state prevailing wage rates change annually and sometimes even more frequently as issues about those rates come up that require adjusting by the department it's important that we give these contractors flexibility and clarity in how these wage rates must be reported to employees now to be clear this isn't flexibility or exemptions from the state's wage death law itself contractors must still follow all payroll laws related to prompt payment overtime minimum and prevailing wage laws and more our members especially appreciate the clarification and how notice violations are defined in the bill if a contractor or an employer makes a mistake in how that notice is disseminated to multiple employees but that mistake doesn't result in any underpayment of wages or any other material issues for the employees we think it's smart policy to treat that as a single violation with only a warning issued and then if like the senator pratt said if there's intentional and repeat violations then we can get into hard-hitting penalties but for those one-time violations where it's an honest mistake we think a warning is good because like we've heard before most of 99 of minnesota employers are trying to do the right thing and we don't want to punish those good actors for for making an inadvertent mistake so thank you for your consideration of the bill i'm happy to answer any questions the committee may have thank you mr hanson hansen on deck we'll have bob ness mr hill please identify yourself for the record and begin your testimony well thank you chair rarick and members for the record my name is todd hill with hill capital strategies and i am representing the minnesota recruiting and staffing association also known as mnrsa prior to covet mnrsa members had more than 800 offices located across the state and employed on average 65 000 workers each week in jobs ranging from engineering to health care manufacturing i t and even legal services staffing firms play an important role in providing flexibility and support to businesses and opportunities and flexibility for employees however staffing firms don't hire people in the same way other businesses do individuals seeking temporary work who successfully complete a staffing firm's application process are considered hired for employment verification purposes uh even when no job assignment is immediately available uh successful applicants are placed in a firm's pool of candidates eligible for uh for assignment but may not receive or be offered specific jobs for days or even perhaps weeks given this fact staffing firms cannot provide individuals with specific rate or job specific information until an actual job offer is made and accepted the changes senator pratt is proposing to minnesota's wage step law we believe allows flexibility for staffing agencies to provide notice to employees but also recognizes the unique uh types of hiring practices these businesses have and i just wanted to give an example and i apologize that my client wasn't able to make it here today and we talked about this in senator pratt's committee last year but i wanted to give a just one example of where the system is creating some challenges for our members we have a handful of staffing agencies that have created a very successful health care practices and oftentimes these businesses are contacted with little notice and asked to provide nurses to area hospitals nursing homes or health care facilities and we are limited in our pool if a candidate hasn't previously worked in that facility it could be an employee that a long-term employee of one of our agencies but if we do not have a signed notice we can't send that candidate over to that to that job and with the requirement that we must receive notice or provide notice uh in advance of that placement if it is a last minute request we often get these calls late at night or after hours and it's just simply not possible for us to get the notice part done in order to place the candidate and in those situations that position may just go unfilled at a nursing home or a hospital this language would allow us to provide a pay range at the start of the employment and it would also eliminate the need to collect signed notification for a new placement for individuals who work for a staffing agency we believe this change provides our members greater flexibility make certain we can meet our clients needs and still protect our employees and with that i want to thank senator pratt for his work on this issue we look forward to continuing this conversation with all the parties that are involved and hope that we can make these changes and and pass them into live this year thank you thank you mr hill uh we'll have a kimberly lewis on deck uh mr nuss please identify yourself for the record and begin your testimony thank you my name is bob ness i'm the president of nest trucking equipment based in rochester minnesota we are a mack truck dealer volvo trucks volvo construction eight we have eight locations in uh minnesota and eau claire wisconsin uh and we have approximately 350 people and a lot of openings says a lot of businesses and we're essential uh business and uh we're supplying the trucking industry which is rolling uh goods and services throughout the country uh we at wes we talked earlier uh when the swage stuff bill came out there was a lot of concerns we had that was an overreach and i do appreciate the changes that senator pratt has outlined in this new proposal that to lessen and soften the uh the burden on businesses um the bill seems to be helpful and it will lessen administrative burdens and on employers that provide greater employer flexibility in complying with the law our hr people have told me in reviewing just the outline that the penalty change is good the clarification on discretionary payments is good and uh we are we also um you know we make changes we also have workers that do work in different classifications uh we all have people that work night shift uh two days a week work day shift three days a week and so they're on different classes uh we have an incentive for uh like for technicians a 10 wage differential for a night shift to incentivize people at work nights and we used to do that at five percent but it it's getting harder and harder to find workers as everybody knows uh skilled workers that are interested and we we're not we don't need workers that are all have four-year degrees we have uh two-year skilled uh diesel technicians uh uh our our biggest concern and um the easier we can make it every we centralize our hr services at payroll we have people at work our hr managers remote and our payroll was in rochester but when changes are made we use a day force payroll system and it's all online so it's hard to do attachments with signature forms the uh the day force is a national concern as most many of you know works very well but we're very pleased to see the changes and i think it's very positive so any i'll be glad to answer any questions thank you uh thank you mr nuss and uh ms lewis will you identify yourself for the record and begin your testimony thank you mr chair and committee my name is kim lewis and i'm with the minnesota school boards association we are a statewide organization serving all 333 school boards across minnesota i'm also representing the association of metropolitan school districts today and the minnesota association of school business officials we so appreciate senator bringing forward this this bill and these changes we have been in constant contact with the department and others regarding some changes that we wanted to see made and they are reflected in this bill our biggest concern as we went forward is that we we don't condone wage theft we want to make sure that as senator pretzel eloquently said you earn your pay and you are paid for it um some of the obstacles that came into place almost immediately have been mentioned before the timing of this bill it was enacted very very quickly and it was difficult for us to get systems in place to to work within this but we did what we could um we had to hire extra staff in many cases because of the sheer number of notices um one school district had up to 10 000 notices that were generated in the year that it's been enacted um and that is just an enormous amount for employees that are maybe moving from position to position um just coming in mr church said it and i know it sounds ridiculous but it is a friday night hassle when you're at the football games and somebody doesn't show up to work the lines or the concessions or what have you and you're grabbing people out of the stands to do that it sounds ridiculous but it is the reality um paraprofessionals or education assistants are moving from special education to a regular classroom to a center-based classroom different things we hire people on the spot because we do have openings um within the buildings the principals oftentimes will hire folks and then work with hr and so the timing of the notices um is really problematic for our groups and we appreciate senator price addressed that on that issue in the bill the biggest thing is the collective bargaining agreement um and i think we had up to five meetings with the department on many of these issues but this was a big one and our most of our positions are bargained they're part of a unit they have a due process as a as an opportunity if there's an issue the collective bargaining agreements lay out all of the uh the positions every type of position the responsibility um the different rates of pay the insurance that is incurred the deductions from checks if they uh the steps and lanes so so much of that is laid out and really the bottom line is so much of the funds that are coming out for the additional staff the paperwork the systems that we need to be compliant with this law are coming out of taxpayers dollars but most importantly they're coming out of the classroom and we just can't afford to have one more thing come out of the classroom where our kids need to have as many opportunities as possible curriculum teachers etc so we appreciate senator pratt you're bringing this forward we're so supportive and even though um masbo is not here or excuse me the the state negotiators aren't here today they were side by side with us in the many meetings that we had with senator pratt and the department and um we all hope that this bill goes forward and isn't is enacted thank you very much for your time and i'll stand for any questions later thank you ms lewis and that is the end of the list that i have as far as our testifiers are concerned uh members i do want to point you to uh two letters that are in our packet the folks who were not able to be here we have a letter from nfib and support and then we have a joint letter from advocates for human rights minnesota afl-cio and sciu state council in opposition to the bill so please make note of those and now we will go to member questions uh i see senator mchugh and you have your hand up thank you very much mr chair um and and thank you very much to all of the people who have come today to testify to this bill it's very helpful of course for all of us to hear your your experience with the wage theft law and um your reaction to these proposed changes so thank you very much everyone um you know i i think that it it does sound like um some of these changes are um certainly in order um changing um notices to allow electronic uh um notifications is very sensible in today today's world this is just how we do things um so so that change sounds like a good idea also um you know allowing for notice of a range of different job classifications for people who frequently switch between those types of jobs there are some very common sense changes that i can see are in this proposed uh bill and i think you know we saw the department of labor and industry is is on board with that as well and i'm glad that m senator pratt is is in discussion with the department and and that they're working on the details there so that's great um i do have some concerns however about the bill um i think that um you know as someone and i'm sure probably many of us um on this committee have this experience that i i've worked a number of lower wage jobs um in in my life and um then eventually um after i became an attorney started working some some more i wouldn't say high paid jobs but middle class type jobs where i also had contract for employment and those of us who have made that transition know the difference in the way that people are treated uh in the way that workers are treated working lower wage jobs versus once you get into the professions in the way that you are shown respect the way that you are given notice about your pay um and i think one of the things that i like about this uh wage theft law from last the last session is that it seems to me that it starts to acknowledge that that difference and it requires our employers across the board to treat workers with some basic respects that are due to people when you hire them for example to let them know how much you're going to pay them before they start to work for you so i am concerned about changing that notice um you know as i understand it these changes would make it so that the uh worker doesn't have to know their pay until up to you know 31 days after they start their first day of work uh that that seems problematic to me um that there wouldn't have to be a notice um in advance of when a worker has a change in their rate of paid you know we heard the the the example of the really nice um grocery store owner who's giving the teenager a bunch of raises who's working really hard and doing a really good job and that it's burdensome to to have to give them the notice every time they give them a raise for doing a good job but um i don't know that it's so burdens i i i i guess i would take issue with that you can send an email and say good job i'm changing your wage from this to this done um i it just seems very basic to me to just require that um again with staffing agencies no notice of pay changes until after they've taken place that's very problematic okay that people deserve that notice of of knowing what they're going to be paid um and the provision for allowing other documentation to substitute um for the wage theft notice um i i think that you know if they're if we're talking about a uh an offer letter that's one thing right but for a lot of these jobs you know they may there there may not be like a formal offer letter they just kind of start working that's where this law is really important it's very important for people to know what they're going to be paid before they start to work um so so i think that there may be well there may be certain documents that it might be okay an employee handbook i mean are you kidding me you know when i when i worked as a waitress or worked as a you know a barista back in the day i i don't maybe i got a handbook i don't know i don't know where it would have been i would have couldn't be able to find it like i mean it's just i think these notices are very very important um and then lastly the 15-day cap um i think that maybe this is one of the biggest problems with these proposed changes um my concern with the 15-day cap is that what that amounts to is just a sort of uh money calculation on the part of an employer and they can just take the penalty if they want to if it makes financial sense for them to do so and and that's problematic uh you know the purpose of the wage theft law it seems to me again is to to show that respect and and then also you know to to allow people to know what they're going to be paid so that they're prepared and then also um to provide disincentives for the type of bad behavior that we're trying to prevent so if it's built into the law that there's a 15-day cap on the penalty then what we're talking about is certain situations where the employer is just gonna make a financial calculation and say hey okay that's fine and you know i'll just end my comments by saying i've worked in legal aid and i've worked as an attorney representing employees and i've spoken to a number of of employees who have faced these kinds of situations and i can tell you that you know as has been alluded to here today oftentimes these employees are working lower wage jobs um and they don't understand what their rights are in regard to their relationship with their employer by the time they end up talking to an attorney some time has passed and um i just think that they're at such a disadvantage already that this wage theft law was a nice step to sort of boost up their status and their their rights and i would hate to see that good step sort of stripped of its essence by some of these provisions and and and made less effective so so those are those are my real concerns about these proposed changes i i really encourage um um senator pratt and the department and you're in your discussions about this bill and and and how it's the final form and iteration that that it's going to take i hope that you will seek the advice of advocates of lower wage employees and you know and these are our frontline employees right these are our essential employees they're the ones who are keeping us running right now through this pandemic so i this this of all times that's not a good time to kind of strip away some of those protections for those employees if anything it's the time to be boosting up those protections so i hope that you'll you'll seek the advice of some attorneys who represent uh these workers and can really speak to the um the on the ground issues that happen when an employee comes in with a with a wage theft issue and how that actually plays out in real life you know notice that noticeably today we heard a lot about the bureaucracy a lot about the the problems for small employers of providing the paper notice and how that's a big hardship but i didn't hear from from the employees whose rights are affected by this so um those are my comments thank you very much um for for the the work on the bill and i'll look forward to following its progress all right before we move to our next question yes senator pratt um if you would like to make uh some responses to some of the comments you're on mute you're on mute center i am on i am on mute thank you thank you mr chair and and uh you know i want to agree with a lot of what senator mckeon just just laid out the idea is uh to make is is not to weaken any of the protections that we have for employees um we're still committed to the to the core values of of the wage theft bill um what we're trying to do is is recognize that um what we've done in in concept when we built the bill didn't necessarily translate well to the real world and how uh and how the uh the law was was intended to work uh i think it was you know miss shot horse said you know i think one of the biggest mistakes we made was uh we passed it may and and the effective date was july and we should have you know we should have pushed that we should have pushed that out uh for more time um you know not every wage theft uh claim or complaint requires an attorney i mean we did set up a process where and we funded uh positions in the department of labor so that the department of labor can represent these people uh and work with the employers to recover uh disputed wages um and and we you know we i i agree with you senator v2 and people should be know what know what they're being paid um but you know if you take my grocery store example it's not where the kid needs to sign the new form every single time it's getting in the way and and i think what we're trying to do is when the bill was rolled out it felt like we were treating 99 of the employers as problem employers when really it's just the opposite and i think senator mcewen said it very well that um we want to make sure that we're recognizing that most of our employers are trying to do the right thing they're trying to treat their their employees well in in a tight job market specifically when we when we implemented this bill it was even more important for employers to create that that type of culture within their companies um all we're trying to do is just make sure that um that the uh the bill the statute fits reality uh and again to the 15-day um you know commissioner robertson and i talked about that yesterday that you know as you said maybe the 15-day uh penalty and wages weren't enough of an incentive to uh to be to come to that agreement uh but i do i do see a problem with an unlimited uh penalty and not having that same pressure for both sides to come together and and so i'm hoping that the department and and we can can find some agreement on that but uh the 15 days was was in statute for decades and and that was the reason for going back to that uh to that standard all right uh senator dornick i see you have your hand up thank you mr chair thank you senator pratt for your hard work on this appreciate that and the testifiers thank you for for testifying i have a question for mr nuss about the discretionary pay issue that he was talking about and the christmas bonus and how that affects if you could share a little bit more on that i'd appreciate that thank you uh well we do uh discretionary bonuses we announced in january um changing pto for instance with all of our employees and actually giving them an opportunity which is something that we have haven't done in the past is we're allowing them to sell back their excess pto that they've unused so in other words if you've accumulated over two weeks let's say you have three weeks of pto unused at the end of the year we will allow you to sell back all of the time that you have at our discretion unless we change but uh as long as you keep one week in the in the bank and so you basically you don't end up losing pto if you don't take it a lot we have a lot of people that don't take their pto especially sales people uh they just keep working and they don't take a day off um but i are commissioned people uh the other thing we've done is uh we we've doubled our pt or our 401k match to encourage people to uh to be involved in our 401k and we've actually in our industry the average enrollment for employers is amongst their employees about 67 percent when we went to auto enroll we we actually went to 97 percent when we made the changes in pto this year we made this announcement on january 7th the uh buyback pto and the uh additional contributions by the company for our 401k our total cost is projected to be about eight hundred thousand dollars on a 28 million dollar payroll for this benefit we analyzed every segment of this and uh but when you we have a issue with the differential when we have people working night shift or day shift and they get in different job classifications as far as rate um having to have the notices we need a little clarity on that and hopefully this bill will clear that up and i i agree i think when we first saw the bill we thought it was an overreach uh you feel as an employer that's got i've been in this business for 50 years i've been founded this company in 1979 in minnesota and we've grown from a dozen people to nearly 350 people today we're fair with our employees all the time and they know that we're always going to do the right thing and anything that we can do to add and attract more employees and and retain the cost of turnover is very very expensive for all businesses i feel bad for small businesses like restaurants and uh small people that were really affected by the covid and they're not essential we're fortunate to be essential however we have the strains of just getting more people it isn't you know when you grow your business and try to expand it isn't getting money the biggest thing is getting qualified people and i think as if you run a good business and you want to grow the challenges is getting people and you're going to always try to pay the best benefits and you're going to try to keep open uh dialogue with all your employees so we just hope that changes can uh soften the impact of the wage step so it doesn't affect her it felt felt like we were being accused of uh not treating our employees fairly i understand and appreciate the comments uh from senator mcewen regarding the entry-level people and people that don't have a handbook or maybe don't you know they're small employers that they just don't do everything right or people that are running uh contract people that are just gig workers and they don't have any rights don't get paid fairly and they don't get benefits uh like we would pay but i appreciate the efforts on this uh bill changes thank you any follow-up senator dornick yes mr chair just a quick follow-up you had mentioned about the relationship with the uh your employees and what the bonuses in christmas just shortly uh elaborate a little bit on that if you would please mr dos yes and what we've done is uh well uh in past years we gave bonuses based on their time that they've been with a company let's say over 10 years in 2020 we paid a bonus for 2019 anybody over 10 years received a thousand dollars discretionary uh uh it wasn't it wasn't profit sharing it was just an additional payment and we even gave bonuses to people who anybody that had started work within 90 days and was employed on december or january 1st of last year received 250 so uh we just we're always thinking of ways that we can attract and retain our employees and hopefully all of these efforts uh add up to a value package so that we're an employer of choice all right thank you mr nuss thank you mr any other questions are you good i'm good thank you all right um senator pratt i know i was mentioned earlier uh but i wanted to just uh reiterate with you and ask you the question does this bill change any criminal penalties in the statute uh no mr chair does not um the the uh felony for intent to defraud is still there uh the the definition of wage theft as a as a crime is still there we're just uh really modifying the administrative uh parts of the bill um and and mr chair i forgot to to senator mcewen earlier i forgot to mention that you know i have been in direct contact with the number of advocates uh for labor that uh you know some of them members of the uh of the wage theft coalition so we'll continue to to work with them as as uh as we progress through the session wage theft was a bipartisan bill uh to get past and and changes to it are going to have to be bipartisan in nature as well all right thank you and um the one thing i want to uh you know add in to this after this wage theft law was passed and i spent that next summer going out to a number of places um i remember one of my electric co-ops two of my schools a couple of small businesses the very first thing i was told when i showed up was before you leave our hr people want to talk to you and it was about this bill and and the things that they had to to do and um and i think one of the things i want we need to be very very careful as we when we talk about this it is we've heard you know and it is true 99 of our employers out there take care of their workers they are doing things right and if we're gonna say things like our employers don't respect their workers uh and we're doing it in a way where we're accusing everyone of that um that that's upsetting and i've heard that from a number of our employers that and i think we heard it today from mr nuss you know when we accuse in a blanket form that employers don't care about their employees we're going down a road that makes it hard for me to then want to support any of these things because we have very good employers in the state of minnesota and they're trying to do things right and i did reach out to a number of small employers after i heard from all these others and the vast majority of them didn't even know or were not aware that this had happened that they were supposed to be sending out notices of any kind to their employees and had that you know i tipped them off and they would look into it so then they were able to comply with the law but so i think this provision that was added in as well to say that your first violation is a warning is very good espec ally for these small employers because they just do not know and don't have the resources to know so under the first violation they can be helped out on help them understand what do they need to do and then if they do it again yes then they can be you know have a penalty to that but so thank you senator pratt um for for that work i think this is very good and uh senator mcewen did i see your hand up with uh wanting to make another comment or question no the question that i had was already answered but thank you thank you mr chair but i do think that the the provision relating to the notice the warning at the first violation of the notice requirement is per is specific to that incident so they could get a first warning and then if they were doing it again it could be you know again there could be many many many first warnings um so i guess that that would just be my reaction thank you mister all right um i do not see any other questions so senator pratt uh would you like to make some closing statements uh thank you mr chair and and uh uh certainly there wouldn't be multiple you know to sarah mcewen's uh concern we wouldn't have multiple first instances we you know we kind of count the first one if multiple employees are kind of caught in in one scenario that becomes an instance but then the next uh the next violations would certainly become uh would not necessarily be forgivable it would be to the discretion of the department uh mr chair you know i i as i mentioned i've i've talked to you know certainly the employer community that's that's having to comply with the statute and i've talked to uh advocates that are on the wage step coalition uh really to uh to make sure that they understand we're not trying to weaken any of the employee protections um we're trying to make the bill work in the real world so that uh it's it's to nobody's benefit uh to have a bill that is hard to comply with a bill that gets in between some of the good relationships that employers have with their employees and that their employees have with their employers um and and just recognizing that i'm not saying it's it's a perfect bill and and you know as i told uh commissioner robertson i will continue to work with her and her team to work through some of the concerns that the department has i will continue to be in contact with the with some of the folks on the on the wage theft coalition uh because this really uh is something that uh i think is important for us to get done this year and uh mr chair i would just you know ask that uh when the bill was moved it'd be moved to the to the jobs committee so that we can continue to do that work uh since we've agreed that um we will most likely put our two bills together because of the close synergy between our two committees thank you senator pratt and uh yeah seeing no further questions i move that the senate file 9 19 be recommended to pass and be sent to the committee on jobs and economic growth members please unmute yourselves and turn on your cameras all those in favor say aye all right the motion passes senator pratt the bill is now in your committee thank you mr chair i appreciate that and members uh with there is nothing else on our agenda so we are adjourned [Music] you