A bill for an act
relating to employees; prohibiting misclassification of employees; imposing
penalties; classifying data; amending Minnesota Statutes 2022, sections 177.27,
subdivision 3; 181.171, subdivision 1; 181.722; 181.723; 270B.14, subdivision
17, by adding a subdivision; 326B.081, subdivisions 3, 6, 8; 326B.082, subdivisions
1, 2, 4, 6, 7, 10, 11, 13, by adding a subdivision; 326B.701; Minnesota Statutes
2023 Supplement, section 177.27, subdivisions 1, 2, 4, 7; proposing coding for
new law in Minnesota Statutes, chapter 181.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 177.27, subdivision 1, is amended
to read:


Subdivision 1.

Examination of records.

The commissioner may enter during reasonable
office hours or upon request and inspect the place of business or employment of any employer
of employees working in the state, to examine and inspect books, registers, payrolls, and
other records of any employer that in any way relate to wages, hours, and other conditions
of employment of any employees. The commissioner may transcribe any or all of the books,
registers, payrolls, and other records as the commissioner deems necessary or appropriate
and may question the new text begin employer, new text end employeesnew text begin , and other personsnew text end to ascertain compliance with
new text begin any of the new text end sections deleted text begin 177.21 to 177.435 and 181.165deleted text end new text begin listed in subdivision 4new text end . The commissioner
may investigate wage claims or complaints by an employee against an employer if the failure
to pay a wage may violate Minnesota law or an order or rule of the department.

Sec. 2.

Minnesota Statutes 2023 Supplement, section 177.27, subdivision 2, is amended
to read:


Subd. 2.

Submission of records; penalty.

The commissioner may require the employer
of employees working in the state to submit to the commissioner photocopies, certified
copies, or, if necessary, the originals of deleted text begin employmentdeleted text end records new text begin that relate to employment or
employment status
new text end which the commissioner deems necessary or appropriate. The records
which may be required include full and correct statements in writing, including sworn
statements by the employer, containing information relating to wages, hours, names,
addresses, and any other information pertaining to the employer's employees and the
conditions of their employment as the commissioner deems necessary or appropriate.

The commissioner may require the records to be submitted by certified mail delivery
or, if necessary, by personal delivery by the employer or a representative of the employer,
as authorized by the employer in writing.

The commissioner may fine the employer up to $10,000 for each failure to submit or
deliver records as required by this section. This penalty is in addition to any penalties
provided under section 177.32, subdivision 1. In determining the amount of a civil penalty
under this subdivision, the appropriateness of such penalty to the size of the employer's
business and the gravity of the violation shall be considered.

Sec. 3.

Minnesota Statutes 2022, section 177.27, subdivision 3, is amended to read:


Subd. 3.

Adequacy of records.

If the records maintained by the employer do not provide
sufficient information to determine the exact amount of back wages due an employee, the
commissioner may make a determination of wages due based on available evidence deleted text begin and
mediate a settlement with the employer
deleted text end .

Sec. 4.

Minnesota Statutes 2023 Supplement, section 177.27, subdivision 4, is amended
to read:


Subd. 4.

Compliance orders.

The commissioner may issue an order requiring an
employer to comply with sections 177.21 to 177.435, 179.86, 181.02, 181.03, 181.031,
181.032, 181.101, 181.11, 181.13, 181.14, 181.145, 181.15, 181.165, 181.172, paragraph
(a) or (d), 181.214 to 181.217, 181.275, subdivision 2a
, 181.635, 181.722, new text begin 181.723, new text end 181.79,
181.85 to 181.89, 181.939 to 181.943, 181.9445 to 181.9448, 181.987, 181.991, 268B.09,
subdivisions 1 to 6, and 268B.14, subdivision 3, with any rule promulgated under section
177.28, 181.213, or 181.215. The commissioner shall issue an order requiring an employer
to comply with sections 177.41 to 177.435, 181.165, or 181.987 if the violation is repeated.
For purposes of this subdivision only, a violation is repeated if at any time during the two
years that preceded the date of violation, the commissioner issued an order to the employer
for violation of sections 177.41 to 177.435, 181.165, or 181.987 and the order is final or
the commissioner and the employer have entered into a settlement agreement that required
the employer to pay back wages that were required by sections 177.41 to 177.435. The
department shall serve the order upon the employer or the employer's authorized
representative in person or by certified mail at the employer's place of business. An employer
who wishes to contest the order must file written notice of objection to the order with the
commissioner within 15 calendar days after being served with the order. A contested case
proceeding must then be held in accordance with sections 14.57 to 14.69 or 181.165. If,
within 15 calendar days after being served with the order, the employer fails to file a written
notice of objection with the commissioner, the order becomes a final order of the
commissioner. For the purposes of this subdivision, an employer includes a contractor that
has assumed a subcontractor's liability within the meaning of section 181.165.

Sec. 5.

Minnesota Statutes 2023 Supplement, section 177.27, subdivision 7, is amended
to read:


Subd. 7.

Employer liability.

If an employer is found by the commissioner to have
violated a section identified in subdivision 4, or any rule adopted under section 177.28,
181.213, or 181.215, and the commissioner issues an order to comply, the commissioner
shall order the employer to cease and desist from engaging in the violative practice and to
take such affirmative steps that in the judgment of the commissioner will effectuate the
purposes of the section or rule violated. new text begin In addition to remedies, damages, and penalties
provided for in the violated section,
new text end the commissioner shall order the employer to pay to
the aggrieved parties back pay, gratuities, and compensatory damages, less any amount
actually paid to the deleted text begin employeedeleted text end new text begin aggrieved partiesnew text end by the employer, and for an additional equal
amount as liquidated damages. Any employer who is found by the commissioner to have
repeatedly or willfully violated a section or sections identified in subdivision 4 shall be
subject to deleted text begin adeleted text end new text begin an additionalnew text end civil penalty of up to $10,000 for each violation for each employee.
In determining the amount of a civil penalty under this subdivision, the appropriateness of
such penalty to the size of the employer's business and the gravity of the violation shall be
considered. In addition, the commissioner may order the employer to reimburse the
department and the attorney general for all appropriate litigation and hearing costs expended
in preparation for and in conducting the contested case proceeding, unless payment of costs
would impose extreme financial hardship on the employer. If the employer is able to establish
extreme financial hardship, then the commissioner may order the employer to pay a
percentage of the total costs that will not cause extreme financial hardship. Costs include
but are not limited to the costs of services rendered by the attorney general, private attorneys
if engaged by the department, administrative law judges, court reporters, and expert witnesses
as well as the cost of transcripts. Interest shall accrue on, and be added to, the unpaid balance
of a commissioner's order from the date the order is signed by the commissioner until it is
paid, at an annual rate provided in section 549.09, subdivision 1, paragraph (c). The
commissioner may establish escrow accounts for purposes of distributingnew text begin remedies andnew text end
damages.

Sec. 6.

Minnesota Statutes 2022, section 181.171, subdivision 1,