Wage theft cases pick up and other labor news 

PSA: You’re allowed to take off work to vote early

By: - October 20, 2023 10:52 am

Minnesota Attorney General Keith Ellison points to an illustration of the layers of subcontractors common on construction projects. “The person at the top of that ladder deserves dignity, deserves respect and deserves to be paid fairly,” Ellison said during a news conference on May 12, 2022 in Minneapolis.

Take a seat in the Break Room, our weekly round-up of labor news. 

Results from the state’s newly expanded Wage Theft Unit

The Attorney General’s Office doubled the size of its Wage Theft Unit this year — adding two more lawyers and one more investigator — with additional funding approved by Democrats in control of the Legislature.

The unit was created in 2019, the same year state lawmakers passed one of the toughest wage theft laws in the country: It is a felony in Minnesota to steal wages of more than $1,000. Yet several years on, the law has only been charged a handful of times. Labor advocates blame a lack of investigatory capacity and know-how by local law enforcement, who are responsible for investigating cases to turn over to county prosecutors.

That seems to be changing, with more money flowing to the Attorney General’s Office for civil cases, and to the Commerce Department, which also has new powers to conduct criminal investigations of white-collar crimes including wage theft.

In his annual report, Attorney General Keith Ellison said the Wage Theft Unit is working on “numerous non-public investigations” which include worker misclassification, nonpayment of overtime and minimum wage violations.

Ellison’s office also highlighted cases he’s brought against the following companies:

  • Shipt: In 2022, Ellison’s office filed suit against the Target-owned delivery service, alleging the company misclassified its workers as independent contractors and deprived them of overtime pay, local minimum-wage protections and sick- and safe-time protections. As independent contractors, they also aren’t eligible for unemployment benefits or workers’ compensation. Litigation is ongoing.
  • Property Maintenance & Construction: The Attorney General’s Office entered into a settlement agreement this month with a construction contractor accused of obstructing an investigation into wage theft and misclassification by threatening workers and telling them to lie to state regulators. The contractor agreed to pay $7,500, turn over documents to the state, and tell workers that they may cooperate with the investigation. The deal clears the way for the state Department of Labor and Industry to finish its investigation, laying the groundwork for another civil case and possibly criminal charges.
  • Madison Equities: The Attorney General’s Office has brought a lawsuit against a major property management company for failing to pay overtime to numerous security guards. Madison Equities refused to produce information, and the Wage Theft Unit brought a case to get the records, which went up to the state Supreme Court. The Attorney General’s Office won its fight for information and is currently litigating the case over the employer failing to pay overtime wages.

Ellison’s office also represented the Department of Labor and Industry in a child labor case, winning a temporary restraining order against a meat-processing company, and in cases involving workers who have died or been seriously injured on the job.

Federal labor regulators have also stepped up enforcement of child labor law violations, which are up 88% since 2019, according to the Washington Post.

Contractor pleads guilty to insurance fraud

The owner of a construction company pleaded guilty to charges of workers’ compensation insurance fraud earlier this month. The case involved a worker who suffered permanent eye damage from a nail on the job. Nelson Israel Lopez Giron, owner of the wood-framing company Giron Construction, initially offered the worker eye drops and then told the worker to lie about how he suffered the injury when he sought medical help, according to the initial charging documents as reported by Star Tribune.

Giron also did not report the injury to insurance, and then denied knowing who the worker was. Giron told his insurer he didn’t have any employees even though he had 15 direct employees on the jobsite the day the worker was injured, according to a state investigation. Authorities concluded Giron Construction should have paid more than $20,500 a year in workers’ compensation premiums.

Giron’s firm won contracts from numerous large developers including Dominium, MWF, Enclave, and Trident Development.

The worker organization Centro de Trabajadores Unidos en Lucha (CTUL) supported the employee financially as he received multiple medical treatments.

“Labor brokers like Nelson Lopez Giron use misclassification as a way to cut costs and win contracts, leading to severe abuses of workers’ rights, including wage theft, dangerous working conditions, and at the extreme, labor trafficking,” CTUL co-director Merle Payne said in a statement.

Uber and Lyft drivers schism

Uber and Lyft drivers have schismed over allegations that the leader of an influential drivers’ group failed to negotiate with the companies or communicate details of a possible deal that could’ve won them higher paychecks by now.

Some drivers’ frustrations boiled over on Tuesday when several repeatedly interrupted a meeting of the governor’s task force responsible for recommending legislation on drivers’ wages and working conditions. They said the drivers on the committee no longer represent them.

The Minnesota Uber/Lyft Drivers Association has until now shown a united front, turning out hundreds of drivers to march through the halls of the state Capitol and Minneapolis City Hall to demand higher wages and protections against unfair termination, or deactivation.

The group of largely East African immigrants successfully pressured state lawmakers to pass a bill guaranteeing them higher wages and protections against deactivation, even after Uber threatened to pull out of the state if the bill became law.

After the governor vetoed the bill — his first veto — and created a task force to propose legislation next year, the group’s president, Eid Ali, and two of its members were appointed to the three seats dedicated to drivers.

There are now three groups claiming to represent drivers and each accuses the other of being made up of interlopers who don’t actually drive for the apps. The task force has until Jan. 1 to submit recommendations to Gov. Tim Walz.

Walz and Frey visit UAW strike

Walz, Lt. Gov. Peggy Flanagan and Minneapolis Mayor Jacob Frey walked the picket line with United Auto Workers members outside a Stellantis parts distribution center in Plymouth, where about 50 workers have been on strike for a month. Another 80 workers are striking at a General Motors parts distribution center in Hudson, Wisc.

About 34,000 union members at Ford, General Motors and Stellantis are on strike across the country, which has cost the Detroit Three automakers, suppliers, dealers and workers more than $7.7 billion in the first four weeks, according to a Michigan-based economic research consultancy.

Ford’s latest offer includes a 23% raise through early 2028 — higher than either GM or Stellantis has offered — and the company said it has reached its limit.

UAW President Shawn Fain has made high CEO compensation a central focus of the strike, pointing to the 40% pay raises CEOs have enjoyed in the last four years compared to the 6% increases autoworkers have received since 2019.

This week Fain said Ford CEO Jim Farley should “go get the big checkbook — the one Ford uses when it wants to spend millions on company executives or Wall Street giveaways.”

Allina nurses back on the picket line

Union nurses at three of Allina Health hospitals say they’re headed back to the picket line next week to raise awareness about proposed nursing staff reductions and cuts to service. The demonstration is not a strike.

“Allina Hospital is attempting to enforce a workforce reduction of nursing staff, which they are referring to as benchmarking, and increase our nurse-to-patient ratios on the majority of inpatient units,” said Brittany Livaccari, a nurse at United Hospital, in a statement. “This type of benchmarking puts our communities at risk for increased adverse events within the hospitals that are so trusted by our residents.”

The Minnesota Nurses Association also says Allina is closing adolescent mental health beds at United and the infusion center at Abbott Northwestern. The union says nurses will picket on Oct. 26 at Abbott Northwestern, Mercy and United hospitals.

Allina Health has faced a deluge of labor activity in recent years including a three-day strike by thousands of its nurses last year. Doctors at its Mercy Hospital and 61 primary and urgent care clinics have also voted to unionize.

PSA: You can take time off work to early vote

Minnesota law has guaranteed workers the right to take time off to vote on Election Day since 1981 — “without penalty or deduction in salary or wages.” This year, lawmakers expanded that right to cover early voting, so eligible voters may take off work to cast ballots in person ahead of Election Day.

It’s easy for Minnesotans to vote by mail or in person for weeks ahead of Election Day, so many people can do so without missing work. Still, it’s your right and a misdemeanor for an employer to deny it to their employees.

More information on voting early in person here.

Minnesota adds 8,000 jobs in September

Minnesota added 8,000 jobs last month — the seventh month in a row of labor force growth, according to the state Department of Employment and Economic Development. Minnesota gained 49,809 payroll jobs over the year — up 1.7% — and unemployment remained lower than the national average at 3.1%.

The state added construction jobs faster than the rest of the country but the biggest gains by far were in education and health services followed by leisure and hospitality.

Overall, economic data paints a rosy picture of the American labor market and household finances. The typical household’s net worth, or wealth – the value of their financial assets minus their debts – has swelled by 37% since 2019, to $192,000, according to the federal Survey of Consumer Finances. It’s the largest three-year increase in wealth in the modern history of the report, more than twice as big as the previous.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.