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    NO VIOLATION OF MINNESOTA FAIR LABOR STANDARD ACT, BUT . . .


    A Minnesota Court of Appeals was recently required to interpret the Minnesota Fair Labor Standard Act, a situation that does not occur on a regular basis. At issue was whether or not the prepayment of bonuses, and then their deduction when the prepayment was determined to be erroneous as a result of lower performance during the year, meant that the person had not received a guaranteed predetermined weekly wage, a requirement of the Minnesota Fair Labor Standard Act. The employees at issue were actually determined to be salaried under the Minnesota Act, as they received a consistent weekly wage and the additional payments and deduction were simply part of the employers practice of advancing annual bonuses in monthly installments, which lead, on occasion, to overcompensation. However, the right reserved in the plan to reclaim bonus overpayments through a reduction of the employee’s paycheck was in violation of a Minnesota law that prohibits employers from making deductions from wages earned by an employee to recover for property loss or “claimed indebtedness running from the employee to the employer” unless the deductions have been “voluntarily authorize[d] . . . in writing . . . “ Even though the payments were made in accordance with the plan that the employee was fully aware of, there was no writing approving them, and the employee was entitled to an amount equal to twice the amount of the deduction or credit taken. Erdman v. Life Time Fitness, Inc. (Minn. Ct. Ap. 2010).

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