As we told you last month, effective January 1, 2025, more generous paid time off programs are impacted by amendments to the Minnesota ESST statute.
Under the prior version of ESST, employers that had more generous paid time off policies, for example, PTO policies providing benefits beyond the minimum hours required by the ESST statute, were not required to comply with the ESST statute (including notice, documentation, and protection from retaliation) for any leave benefits which were more than the 48 hours (or 80 hours in a subsequent year) minimums required by the ESST statute.
According to the 2024 amendments to the ESST statute, however, this is no longer the case. The amended statute provides that “[a]ll paid time off and other paid leave made available to an employee by an employer in excess of the minimum amount required in section 181.9446 for absences from work due to personal illness or injury, but not including short-term or long-term disability or other salary continuation benefits, must meet or exceed the minimum standards and requirements provided in sections 181.9445 [which includes the statutory ESST definitions and the statutory mandated use of ESST] …” except for the accrual rates under the ESST statute.
What does this even mean? Originally (and this was the wishful thinking part), we hoped that this amendment only required employers to “protect” additional PTO beyond the minimum ESST requirements to employee use of PTO for their own “personal illness or injury.” (That’s a reasonable interpretation, isn’t it, given that’s actually what the statute says?) In other words, the expansion of the statute did not apply to taking PTO for ESST reasons other than for the employee’s own illness or injury.
Sadly, this was wishful thinking on our part. The Minnesota Department of Labor and Industry (DOLI) is taking a broader view of the amendments, and it appears to be the DOLI’s position that the additional PTO can be used for any of the reasons covered by the ESST statute. In a recent update to the DOLI website, DOLI described the amendment follows:
If an employer provides employees with paid time off (PTO) or other paid leave that is more than the amount required under the ESST law for absences due to personal illness or injury, the additional PTO must meet the same requirements as the ESST hours, other than the ESST accrual requirements. For example, if an employee receives 50 hours of PTO in addition to the minimum requirement of 48 ESST hours per year, the employer must follow the ESST requirements about notice, documentation, anti-retaliation, replacement workers and more for the PTO hours in addition to the ESST hours.
https://dli.mn.gov/sick-leave-changes
So, what does this really mean? If the DOLI is intending to interpret the amendment broadly to require all PTO to be eligible for use as ESST, this means that employees may use PTO (even though it may be well in excess of the ESST statutory minimums) for any of the multiple reasons covered by the ESST statute. For example, an employee receives 120 hours of PTO on their anniversary in addition to PTO time granted the previous year, the employee may use the 120 hours of PTO for vacation or for any reason covered by the ESST statute.
Are there any exceptions to the use of PTO under the revised ESST statute? According to the amendment, for any PTO accrued prior to January 1, 2024 (the effective date of the ESST statute), “an employer may require an employee who uses such leave to follow the written notice and documentation requirements in the employer’s applicable policy or applicable collective bargaining agreement” under any [PTO] rules which existed before January 1, 2024. In other words, employer documentation requirements (such as requiring doctor’s note or 24 hours’ notice) would apply only to time that accrued prior to 2024 and only if those requirements existed prior to January 1, 2024.
Does this mean that all PTO plans are a free-for-all? Not necessarily, or maybe better said, not quite. Since PTO time over and above ESST minimum requirements can be used for any ESST reason, it follows that an employer can require employees to comply with the ESST rules, including advance notice, if possible, and requirements for following company call-in procedures. This is likely small solace because what this amendment also means is that employers who provide generous amounts of PTO will have a far more difficult time holding employees accountable for unpredictable, missed work as employees can easily claim that such absences are protected by ESST.
It is also important to note that with respect to PTO use that is solely for rest and relaxation (i.e., a vacation), it is likely that employers will still be allowed to use and enforce any existing rules they may have about request and approval of PTO used for vacation if it’s clearly defined in the PTO policy.
Bottom Line
For employers who provide more generous amounts of PTO than the minimum requirements of ESST, it may be time to consider whether you want to make changes to those policies to limit the impact of the changes to more generous policies. For example, an employer could consider dividing a generous PTO policy into sick time (subject to ESST) and vacation time (not subject to ESST).
If it’s possible to divide up an employer’s PTO plan into pre-2024 versus post-2024 accrual, an employer can impose whatever notice or documentation requirements existed before January 1, 2024. If that is not possible, then the new provisions effective January 1, 2025, will apply.
Short of changing your PTO plan or divvying it up into pre-2024 and post-2024 accrual, effective January 1, 2025, employers will be required to allow all PTO to be used for any reason covered by the ESST statute under DOLI’s interpretation of the most recent amendment.