Minnesota made wage theft a felony in 2019 by passing the Minnesota Wage Theft Prevention Act.
A Hennepin County District Court judge handed down Minnesota’s first wage theft conviction on Wednesday against a painting contractor, Frederick Leon Newell, for stealing more than $35,000 in wages from five workers at an affordable housing development in Minneapolis.
Prosecutors and union leaders heralded the conviction as a major step forward in the state’s yearslong effort to crack down on wage theft, which is more common than robbery, according to some estimates despite being rarely prosecuted.
“This prosecution and conviction should send a message to all workers: Your wage complaints will be taken seriously and thoroughly investigated and prosecuted,” Hennepin County Attorney Mary Moriarty said at a news conference on Thursday.
In 2019, Minnesota legislators passed one of the most stringent wage theft laws in the country, making it a felony to steal more than $1,000, like other forms of theft. Yet few have been charged in the past six years, in large part because of a lack of knowhow and resources by local law enforcement to investigate white collar crimes.
Newell will likely be put on probation for three to five years but could face a year in the county workhouse for the felony convictions of wage theft and theft by swindle when he’s sentenced in June, Moriarty said.
The convictions stem from painting and cleaning work Integrated Painting Solutions was hired to do in 2020 on the Redwell, an affordable apartment complex in Minneapolis.
Newell’s company received more than $320,000 for the work on the development, which required that he pay a prevailing minimum wage of $36 per hour for painters and $36.41 per hour for general laborers plus benefits because it received public funding through tax increment financing.
Newell paid his workers far less than required — from $15 to $25 per hour — and submitted falsified payroll records to cover up the underpayments. All told, Newell stole more than $35,000 in wages from five workers, with one employee underpaid by nearly $14,000 over just three months in 2020, according to the criminal conviction.
The case came to light after the workers filed complaints with the city of Minneapolis’s Civil Rights Division, with the help of the International Union of Painters and Allied Trades union.
The city investigated their claims and in June 2021 issued a violation letter to Integrated Painting Solutions that employees were owed restitution for unpaid wages. Newell signed a settlement agreement with the city to pay $43,166 in restitution but never did.
Greiner Construction, the general contractor for the Redwell, voluntarily made Newell’s workers whole beyond what they had already paid to Newell’s company.
In 2022, the previous Hennepin County attorney, Mike Freeman, filed charges against Newell after receiving a referral from the city of Minneapolis.
Hennepin County District Court Judge Michael Burns presided over a bench trial in the case in January. Prosecutors called 12 witnesses and submitted 60 exhibits while Newell didn’t call any witnesses or submit any evidence. His attorney argued that prosecutors hadn’t met the burden of proof beyond a reasonable doubt.
Burns determined there was sufficient evidence to convict Newell of the two felonies and also ruled that there are factors justifying a longer sentence than the stayed 21 month prison term recommended under the state’s sentencing guidelines.
Newell may still operate a painting contracting business though he is effectively barred from publicly funded projects in Minneapolis and may face similar restrictions at the state level, according to the Hennepin County Attorney’s Office.
On Thursday, Jordan Fry, a business agent with the painters union, encouraged workers to report labor law violations so that low-road contractors are held accountable.
“You must come forward to tell your story,” Fry said. “We are here… we will stand with you.”
While prosecutors and labor leaders celebrated the convictions, they also acknowledged that the slow pace of justice is a significant impediment to deterrence.
The convictions come five years after the crime occurred, illustrating the low priority wage theft cases have in finding time on court schedules packed with murders, assaults, burglaries and rapes.
“We are trying to figure out how to make these cases go a little faster,” Moriarty said, which includes encouraging the court to set aside a judge to handle wage theft cases.
“It’s hard to hold people accountable when they know they’re not actually going to see a judge,” she said.
Minnesota Reformer