State supreme court upholds DLI order for home care employer to pay employees unpaid overtime wages, damages

In a win for Minnesota's workers, the Minnesota Supreme Court issued a decision Sept. 18, 2019, that upheld an order issued by the commissioner of the Department of Labor and Industry (DLI) for Baywood Home Care to pay its affected employees approximately $550,000 in unpaid overtime wages and an equal amount in liquidated damages.

This case first arose after DLI received a complaint about failure to pay overtime for hours worked in excess of 48 hours in a workweek in violation of Minnesota law. The court ruled that, according to Minnesota law, "once an employee has worked 48 hours in a workweek, the employer must pay that employee at a rate of at least 1-1/2 times the employee's regular rate of pay for any additional hours worked, regardless of how the employee was compensated prior to working 48 hours."

The court also ruled that Baywood may not exclude the "premium" payments Baywood claimed to have made for certain hours employees worked each day from the calculation of the regular rate.

"All Minnesotans deserve to be paid every dollar they are owed for the work they perform. But too many workers are not being paid their full wages. With this decision, these employees are now one step closer to being correctly compensated for their work and for the harm they experienced," said Nancy Leppink, DLI commissioner. "Our department is pleased with the court's decision and proud of the efforts of its staff and the Attorney General's Office to ensure employees receive the pay they are entitled to under the law.

"The ruling makes clear that employer schemes – old and new – that are used to deny workers the wages they are legally owed will not withstand the scrutiny of the department and of the Minnesota Supreme Court and that the court will ground its interpretation in the law's stated purpose, 'to maintain workers' health, efficiency and general well-being.'"

This case arose under the Minnesota Fair Labor Standards Act, which requires overtime be paid for hours worked in excess of 48 hours in a workweek, rather than the federal Fair Labor Standards Act, which requires overtime pay for hours worked in excess of 40 hours in a workweek. Prior to 2015, the affected employees were exempt from overtime requirements under federal regulations. The federal overtime requirements now apply to these workers.

Wage theft in Minnesota

It is estimated Minnesota workers and their families are losing up to $12 million each year in unpaid wages. Wage theft denies workers and their families needed wages for food, shelter and other needed essentials.

During this past legislative session, a coalition of leaders helped address the growing problem of wage theft. They passed a new wage theft law that created additional protections for workers, added criminal penalties for employers that commit wage theft and leveled the playing field for employers that play by the rules and pay their workers in compliance with the law.

Currently, DLI is focused on establishing its new wage theft enforcement program. The department is in the process of adding and training staff members to perform strategic and targeted workplace enforcement and conduct outreach and education for employers, workers and their communities.

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