The below information is a high-level summary of the legislative changes.  We are hosting a Webinar on Friday, June 14 from 8:30 – 11:00 a.m. to discuss the Minnesota legislative changes in more detail, and we will be discussing several other recent changes at the federal level. This includes the new FLSA rule on exempt employees and salary thresholds and the FTC’s non-compete ban.  The Webinar is free, you can earn 2.25 hours of continuing education credits, and it will be well worth your time to attend.  More information can be found here. We look forward to seeing everyone there.

Earned Sick and Safe Time Changes

The 2024 Minnesota legislature passed a number of changes to the ESST law.  These changes merit close review and given the number of changes, we have separately reported on them here.

Salary Ranges Required in All Job Postings

Starting January 1, 2025, Minnesota law requires employers to disclose salary ranges in all job postings.  The law requires an employer to disclose in every job posting the “starting salary range” and “a general description of all of the benefits and other compensation (i.e., health, retirement benefits) to be offered to a hired applicant.”  Salary range means “the minimum and maximum annual salary or hourly range of compensation, based on the employer’s good faith estimate” for the position.  The salary range cannot be open-ended (i.e., “$75,000 +”) and, if the employer does not want to post a range, then they must list a fixed pay rate.  The law does not compel employers to have a written job posting whenever it needs to hire someone.  Instead, it just requires a salary range if the employer decides to have a job posting.  Importantly, the term “employer” only includes companies who employ more than 30 employees in Minnesota, so small employers under that threshold are exempted from this law.

Restrictive Covenants in Service Contracts

Following on the heels of MN’s non-compete ban enacted last year, the Minnesota legislature passed a law that bans restrictive covenants in service contracts.  The law prohibits an agreement between a customer and a “service provider” that restricts or prohibits the customer from soliciting or hiring any employees of the service provider. The law becomes effective July 1, 2024, and only applies to agreements entered into after that date.

Examples of these types of service contracts include a daycare provider that requires all of their families to enter into an agreement that prohibits families from directly hiring their employees as nannies.  Or accounting firms, IT providers, consulting companies, or other service providers that require their customers to agree to not hire their employees to work directly for the customer in an in-house position. All of these types of restrictions are now prohibited in Minnesota except for pre-existing agreements which are grandfathered in.

Definition of “Disability,” “Discriminate,” and “Familial Status” Expanded Under Minnesota Human Rights Act (MHRA)

The definition of “disability” under the MHRA has historically been defined as “any person who (1) has a physical, sensory, or mental impairment which materially limits one or more major life activities; (2) has a record of such an impairment; or (3) is regarded as having such an impairment.”  The Minnesota legislature added a fourth category: a person who “has an impairment that is episodic or in remission and would materially limit a major life activity when active.”

The term “discriminate” has been defined as to “segregate or separate and, for purposes of discrimination based on sex, it includes sexual harassment.”  Under the new law, harassment is no longer limited to “sexual harassment,” which expands the scope of “discriminate” to include any harassment made due to any other protected class (race, religion, age, disability, etc.).

The definition of “familial status” has been limited to situations where “one or more minors” are domiciled with the minor’s parents or guardians.  The definition has been expanded to include certain categories of adults – “[F]amilial status also means residing with and caring for one or more individuals who lack the ability to meet essential requirements for physical health, safety, or self-care because the individual or individuals are unable to receive and evaluate information or make or communicate decisions.”

Each of these changes is effective August 1, 2024.

Additional Penalties and Remedies Under the MHRA

Employers have long been subject to compensatory damages (lost wages, emotional distress damages, etc.) and attorneys’ fees if found to have violated the MHRA. The amended statute states that a “court shall order” a party who violates the MHRA “to pay a civil penalty to the state” in addition to other damages available to the aggrieved party. In addition, if a party has engaged in an “unfair discriminatory practice,” the court “shall” award to the aggrieved party “compensatory damages, including mental anguish and suffering, in an amount up to three times the actual damages sustained.”  The statute also recognizes the availability of punitive damages and no longer caps them at $25,000.  In addition to monetary remedies, a court may also order equitable relief, including “the hiring, reinstatement, or upgrading of an aggrieved party who has suffered discrimination, with or without back pay.”

These changes are also effective August 1, 2024.

Religious Organizations Exempted From Certain Aspects of the MHRA

The MHRA has a provision that provides religious organizations certain exemptions under the MHRA, including being able to “give preference to persons of the same religion or denomination” in hiring.  The Minnesota legislature has expanded the scope of this exemption to be consistent with the First Amendment and the ministerial exception recognized by the U.S. Supreme Court in the Hosanna Tabor and Our Lady of Guadalupe decisions.  The amended version of the statute continues to allow religious organizations to give religious preference when hiring.  But it also states that religious organizations are not prohibited from “taking any action with respect to education, employment, housing and real property, or use of facilities” when such action is made consistent with the organization’s religious beliefs.  These new provisions only apply to non-profit religious organizations, including religious schools, and does not apply to “secular business activities engaged in” by the religious organization that is “unrelated to [its] religious and educational purpose.”

Additional Penalties and Liability for Misclassifying Employees

Minnesota has had an employee misclassification statute on the books for years which generally prohibits employers from misclassifying employees as independent contractors.  However, the law has been significantly amended with an eye towards enforcement and penalties.

First, if an “owner, partner, principal, member, officer, or agent” of a company “knowingly or repeatedly engaged” in misclassification of employees, then that person may be held personally liable.

Second, the new statute allows for compensatory damages to the individual who has been misclassified, which may include supplemental pay, overtime, shift differentials, vacation pay, sick pay, health insurance, life or disability insurance, retirement plans, Social Security and Medicare, and any other costs and expenses incurred by the individual resulting from the failure to have been classified correctly.

Third, the new statute allows for a penalty of up to $10,000 for each individual the company failed to classify as an employee, a $10,000 penalty for each statutory violation, and a $1,000 per-day penalty for any person who “delays, obstructs, or otherwise fails to cooperate with the commissioner’s investigation.”

Changes to Minnesota’s Cannabis and Drug and Alcohol Testing Laws

There were a number of relatively minor changes to DATWA.  They include allowing employers to use “oral fluid tests” (i.e. saliva tests) for cannabis, drug, and alcohol screens when otherwise allowed under the statute. The oral fluid tests can be administered at the employer’s place of business, which prevents employees having to go off-site to a testing facility.

DATWA originally allowed reasonable suspicion testing if an employer had a reasonable suspicion that an employee “is under the influence of drugs or alcohol.”  When recreational marijuana was legalized during the 2023 legislative session, there were a number of changes to DATWA to reflect that. However, the legislature did not amend the reasonable suspicion language to include cannabis.  That has now been corrected and an employer may require testing if it has a reasonable suspicion that the employee “is under the influence of drugs, cannabis, or alcohol.”

Minnesota Paid FMLA

Minnesota’s Paid FMLA statute is set to go into effect on January 1, 2026.  The legislature passed a number of changes to the statute, many of which address procedural issues with how the State will operate the system.

There are a few noteworthy changes for employers.

First, DEED is required to notify all employers within five business days if an employee has submitted a claim for benefits.

Second, intermittent use of paid FMLA “must be taken in increments consistent with the established policy of the employer” provided that the policy permits minimum increments of at most one calendar day.

Third, if an employer provides an employee with “wage replacement during an absence,” and if those supplemental benefits and paid FMLA leave benefits exceed the employee’s usual salary, then the employee will be required to return the excess to the employer.

Fourth, for employees who are eligible for both disability benefits and paid FMLA, the disability insurance benefits “may be offset by family and medical leave benefits paid to the employee” by the State. However, such offset must be “pursuant to the terms” of the disability policy. Therefore, employers should review their disability policies and make sure there is language allowing offset to prevent the employee from receiving more in disability and paid FMLA benefits than their normal compensation.

Fifth, the original version of the statute states that an applicant is not eligible to receive paid FMLA benefits if they are receiving severance pay. That provision has been deleted from the statute.

Benefit Continuation During Pregnancy-Related Leave and Parenting Leave

If an employee is provided a leave of absence as a form of pregnancy accommodation under Minn. Stat. 181.939, Subd. 2, or is provided pregnancy and parenting leave under Minn. Stat. 181.941, the employer must now maintain health insurance coverage during the leave period. However, the employee “must continue to pay any employee share of the cost of the benefits.”  This change is effective August 1, 2024.

Prenatal Appointments Cannot Be Counted Against 12-Week Pregnancy and Parenting Leave

If an employee needs to attend prenatal care medical appointments, that time away from work cannot be counted against the twelve weeks of “pregnancy and parenting leave” that employers are required to provide to all employees.

Service Animals in Public Places

Minnesota law previously prohibited hotels, restaurants, or other public places from preventing “a blind or deaf person or a person with a physical or sensory disability from taking a service animal into the public place.”  This terminology has been simplified and expanded so that it applies to any “person with a disability” who uses a service animal.  This arguably expands who can use a service animal at public places by including those who did not fit the original definition but still have a disability.

Right to Review Personnel Record

Employers are likely familiar with the Minnesota statute that provides current and former employees the right to review their personnel record upon request. The statute had defined “employer” as those companies that have 20 or more employees.  That definition has changed to “one or more employees,” so all employers in Minnesota are now under the purview of the personnel record statute.

The post Minnesota 2024 Legislative Update appeared first on Felhaber Larson.

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Frequently Asked Questions (addressing the significant provisions of ESST): 

• What is ESST and When Do I Need to Comply?

Effective January 1, 2024, Minnesota’s ESST entitles covered employees to earn paid sick leave for a wide variety of personal and family-related purposes every  year.

• Who are Covered Employees?

1. 1. 1. All employees (including part-time and temporary employees) who work for a Minnesota employer for at least 80 hours, in Minnesota, in a year, are covered.  Employees who work out of state for a Minnesota employer are not covered.
      2. Federal employees and independent contractors are not covered.
      3. Unless there is a contract stating otherwise, temporary employees supplied by a staffing agency are considered employees of the agency and the agency is responsible for ESST obligations.
      4. Certain individuals employed by an air carrier as a flight deck or cabin crew member are not covered.
      5. Building and construction industry employees who are represented by building and construction trades labor organization are not covered if a valid waiver of ESST requirements is provided in a collective bargaining agreement.

• How do Employees Accrue and Carry Over ESST?

Employers must provide each employee working in Minnesota with one hour of ESST for every 30 hours worked, with the ability to accumulate 48 hours each year. Employers may choose to grant more hours. ESST hours accrue on all hours worked, including overtime hours, unless the employee is exempt from earning overtime compensation.

Exempt employees are presumed to work 40 hours a week for the purposes of ESST accrual. If there is clear evidence an exempt employee’s regular work week is less than 40 hours, ESST may accrue based on that employee’s actual regular work week.

Employees may carry over any unused ESST from year to year, but employers may cap the number of hours accrued at 80. Employers can choose to frontload ESST as an alternative to carry over (see below).

ESST hours are calculated and reported based on hours worked. The amounts accrued and available for use, in addition to amounts used each pay period, must be listed on the employee’s earnings statement/paystub.

• How Does an Employer Front Load ESST and How Does it Affect Carryover?

Instead of allowing employees to accrue ESST, employers may adopt a frontloading approach whereby the employer provides an employee with a lump sum of ESST at the beginning of each year or the commencement of employment. Employers who use the frontloading approach are not required to allow employees to carry-over unused ESST at the end of the year. Under this approach, employers have two options:

1. 1. Front loading with pay out and no carryover. Employers provide 48 hours of ESST to an employee, and it is available for immediate use at the start of the year. Any unused ESST hours are paid out at the end of the accrual year* at the employee’s hourly rate.
   2. Front loading with no pay out and no carryover. A minimum of 80 hours of ESST is provided to an employee and made available for immediate use at the start of each year. *The ESST hours the employee did not use are not paid out at the end of the accrual year.

*A “year” means any consecutive 12-month period as determined by an employer and communicated to employees (e.g., calendar year, 12 months based on employee’s work anniversary, or fiscal year).

• How Can Employees Use ESST?

Employees can use ESST for any one of the following reasons:

1. 1. To address an employee’s mental or physical illness, treatment, or preventative care;
   2. To care for a family member’s mental or physical illness, treatment, or preventative care;
   3. For absences related to domestic abuse, sexual assault, or stalking of the employee or a family member;
   4. Time needed when an employee’s workplace closes due to weather or other public emergency or when an employee must care for a family member whose school or place of care has been closed due to weather or public emergency;
   5. When the employee is unable to work or telework because the employer prohibits them from going to work because of health concerns related to the potential transmission a communicable illness related to a public emergency; because the employee is seeking or awaiting results of a diagnostic test for, or a medical diagnosis of, a communicable disease related to a public emergency when the employee has been exposed to the communicable disease or the employer has requested the test or diagnosis;
   6. When it has been determined by a health authority or health care professional that the employee or a family member is at risk of infecting others with a communicable disease.

**The definition of “family member” is quite extensive under ESST state law and includes any individual “related by blood or whose close association with the employee is equivalent of a family relationship.” Employees may also designate one individual annually who will be considered a “family member” for purposes of ESST.

• What Notice of Leave and Documentation Must an Employee Give an Employer?

An employer may only require notice of the need to use ESST leave if the employer has a written policy with reasonable procedures for doing so and provides that policy to employees. If the need for ESST leave is foreseeable, an employer may require up to seven days’ advance notice. If the need is unforeseeable, an employer may require notice of the need for leave as soon as practicable.

Employers may require reasonable documentation regarding the need for ESST leave when an employee uses ESST leave for more than three days in a row. Reasonable documentation includes a signed statement from a health care professional or if documentation cannot be obtained in a reasonable time or without added expenses, then the employee may provide a written statement indicating the employee is using ESST leave for a qualifying purpose. The statute also specifies documents related to ESST leave used for other reasons. An employer is specifically restricted from requiring an employee to disclose details related to domestic abuse, sexual assault, or stalking or the details of the employee’s or the employee’s family member’s medical condition.

• What Notice of Leave and Posting Must an Employer Follow?

Minnesota’s ESST law contains many recordkeeping and notification requirements for employers. Employers will need to notify employees in writing, at the start of employment or on January 1, 2024, whichever is later, of their earned sick and safe leave rights. Although the Department of Labor’s website states a sample employee notice is forthcoming, it has not yet been published. (See here).

Under ESST, employers must provide written notice that contains various mandatory elements.

• What Recordkeeping Must an Employer Follow?

In addition to the notice requirements above, there are additional recordkeeping requirements. At the end of each pay period, employers must provide each employee with an earning statement, either in writing or by electronic means, that includes, among other statutorily required content, (a) the total number of ESST hours accrued and available for use, and (b) the total number of ESST hours used during the pay period.

Employers must retain records documenting, among other information, hours worked by employees and hours of ESST taken by employees. It appears that records will need to be maintained for at least three years in addition to the current calendar year.

• How Do ESST’s Anti-Retaliation Provisions Work? 

An employer may not discharge, discipline, penalize, interfere with, or otherwise retaliate against an employee for asserting earned sick and safe leave rights, for requesting an earned sick and safe leave absence, or pursuing associated remedies.

Further, employers may not factor in any employee’s use of earned sick and safe leave into any attendance point system. ESST related absences are, therefore, “protected” similar to how employers treat FMLA under federal law.

Next Steps

• • Employers that have a paid sick time or PTO policy should review it to ensure it meets the requirements of Minnesota’s new ESST law and includes the mandatory elements and required information.
  • Employers that do not have a paid sick time or PTO policy should start planning and adopting written policies.
  • Employers should coordinate with their payroll providers to ensure they can provide the necessary information on the statement of earnings.

Bottom Line

Preparing for ESST takes time, planning, and careful consideration in light of employers’ existing sick time and/or PTO programs. With the compliance deadline looming, now is the time to get moving. Stay tuned for Part 2 of this series focusing on strategy, nuances under the law, and implementation.

The post State-Wide Earned Sick and Safe Time Leave Law Taking Effect January 1, 2024 appeared first on Felhaber Larson.

All Bloomington employers should consider the following:

1. 1. Develop or review policies to incorporate all mandatory elements, including permitted use of time off, employee eligibility, accrual rates, carryover;
   2. Push out communications including, legal notices, earning statements, and wage statements; and
   3. Update employee handbook to inform employees of their rights and responsibilities.

Finally, based on the Ordinance’s expansive anti-retaliation provisions, Bloomington employers will need to revisit strategy around discipline and accountability for employee attendance issues because use of time off benefits for reasons authorized by the Ordinance give employees additional legal protections.

Bottom Line

With many new laws going into effect in the near future, employers should contact their trusted Felhaber attorney with any questions or for help in drafting and revising policies.

The post Reminder: Bloomington Sick and Safe Leave Ordinance To Take Effect July 1, 2023 appeared first on Felhaber Larson.

Expansion to (Unpaid) Minnesota Parental Leave

In its current form, the Minnesota Parental Leave Act (MPLA), Minn. Stat. §§ 181.940 to 181.944, requires covered employers to provide up to 12 weeks of unpaid leave to qualified employees.  The MPLA applies only to employers with 21 or more employees and, to be eligible, employees must work at least half-time for 1 year.  The MPLA also covers “school conference and activities leave” (§ 181.9412) and expanded uses of “sick leave benefits” (§ 181.9413).

Effective July 1, 2023, the definition of “employer” is amended to include any employer with “one or more employees.”  In addition, the definition of “employee” no longer includes a requirement to work for at least one year or to work at least half-time.  The definition of “employee,” though, still does not include true “independent contractors.”  Thus, as amended, the MPLA will apply to all employers with one or more “employees,” and employees will be immediately eligible for up to 12 weeks of (unpaid) MPLA leave upon hire.

Employers will need to update their parental leave policies to comply with the expanded protections for parents under the MPLA.

Additional Protections for Pregnant and Nursing Mothers

Minn. Stat. § 181.939 includes protections for nursing mothers and requires pregnancy accommodations.  In its current form, both protections apply to any “employer” with 15 or more employees.  Effective July 1, 2023, the protections are expanded to all employers with “one or more employees.”

In addition, the nursing mother protections are presently limited to the 12 months following the birth of the child and an employer is not required to provide break time if it would “unduly disrupt” the operations of the employer.  Effective July 1, both of these restrictions are eliminated:

An employer must provide reasonable break times each day to an employee who needs to express breast milk for her infant child during the twelve months following the birth of the child. The break times must, if possible, may run concurrently with any break times already provided to the employee. An employer is not required to provide break times under this section if to do so would unduly disrupt the operations of the employer. An employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.

The new law also amends the pregnancy accommodation portion of Section 181.939 to include “more frequent or longer restroom, food, and water breaks” and the following examples of reasonable accommodations: “temporary leave of absence, modification in work schedule or job assignments, seating, more frequent restroom breaks or longer break periods, and limits to heavy lifting.”

Employers will need to update their policies and procedures regarding pregnancy accommodations and nursing mothers breaks in order to comply with the amended statute.

New Notice Requirement

Effective July 1, 2023, Minn. Stat. § 181.939 is amended to include a new “notice” requirement for new employees and employees who request parental leave.  Specifically, the new law provides:

An employer shall inform employees of their rights under this section at the time of hire and when an employee makes an inquiry about or requests parental leave. Information must be provided in English and the primary language of the employee as identified by the employee. An employer that provides an employee handbook to its employees must include in the handbook notice of employee rights and remedies under this section. The commissioner shall make available to employers the text to be included in the notice required by this section in English and the five most common languages spoken in Minnesota.

Recently, Minnesota DOLI released its sample notice. The language, however, appears to go much further than what is requested by the new law.

Either way, employers would be wise to add language addressing pregnancy accommodations and parental leave to their Wage Theft Notices, which are required to be distributed to all employees, their leave materials, and their employee handbooks in order to comply with the new notice requirements.

Bottom Line

After one of most active legislative sessions in recent memory, employers will need to take action to comply with the new laws.  If you need assistance, you should contact someone from Felhaber’s Labor & Employment team to assist you.

A special thank you to Alexandra E. Diwik for assisting with this blog post.

The post Effective July 1, 2023, Minnesota Significantly Expands Parenting Leave, Pregnancy Accommodations, and Nursing Mothers Protections appeared first on Felhaber Larson.

We expect these new laws to be signed by Governor Walz in the coming days.

Sexual Harassment and Abuse Settlements and Damages

First, the legislature included language in its omnibus tax bill prohibiting settlement agreements stemming from allegations of sexual harassment or abuse from including a financial payment to the employee in the form of wages or severance pay. Specifically, statute section 181.141 was amended to provide:

In a sexual harassment or abuse settlement between an employer and an employee, when there is a financial settlement provided, the financial settlement cannot be provided as wages or severance pay to the employee regardless of whether the settlement includes a nondisclosure agreement.

This language becomes effective the day following final enactment of the law.

Second, the legislature amended statute section 290.0132 to add a new subdivision addressing damages received by an employee resulting from a sexual harassment or abuse claim:

The amount of damages received under a sexual harassment or abuse claim that is not excluded from gross income under section 104(a)(2) of the Internal Revenue Code because the damages are not received on account of personal physical injuries or physical sickness is a subtraction.

This new section is effective for taxable years beginning after December 31, 2022.

Inquiries into Applicants’ Salary History Prohibited

Finally, Minnesota is poised to become the 29^th state to prohibit employers from inquiring into an applicant’s salary history. The legislature included language in its judiciary bill that will amend the Minnesota Human Rights Act to provide:

An employer, employment agency, or labor organization shall not inquire into, consider, or require disclosure from any source the pay history of an applicant for employment for the purpose of determining wages, salary, earnings, benefits, or other compensation for that applicant. The general prohibition against inquiring into the pay history of an applicant does not apply if the job applicant’s pay history is a matter of public record under federal or state law, unless the employer, employment agency, or labor organization sought access to those public records with the intent of obtaining pay history of the applicant for the purpose of determining wages, salary, earnings, benefits, or other compensation for that applicant.

The new legislation makes clear that applicants are not prevented from “voluntarily” disclosing their pay history “for the purposes of negotiating wages, salary, benefits, or other compensation.” If the applicant voluntarily discloses their pay history, then the employer may consider or act on that “voluntarily disclosed salary history information to support a wage or salary higher than initially offered by the employer[.]” Further, the new legislation provides that employers are not prohibited from providing applicants with “information about wages, benefits, compensation, or salary offered in relation to a position” or from “inquiring about or otherwise engaging in discussions with an applicant about the applicant’s expectations or requests with respect to wages, salary, benefits, or other compensation.”

The ban on inquiries into applicant’s salary history is effective January 1, 2024. However, for employment covered by collective bargaining agreements, the legislation “is not effective until the date of implementation of the applicable collective bargaining agreement that is after January 1, 2024.”

Bottom Line

While other pieces of legislation may be grabbing the headlines, employers should take note of these important changes in the law. We will continue to review the new laws passed by the legislature and provide updates accordingly.

The post Legislature Passes Laws Impacting Settlement Agreements, Damages for Claims of Sexual Harassment and Abuse, and Employers’ Ability to Inquire into Applicants’ Pay History appeared first on Felhaber Larson.

MN-PFML still needs to be signed by Governor Walz, but he has already committed to sign it.  Thus, employers should begin planning to implement MN-PFML and consider changes to their current suite of benefits, including short-term disability policies, given the new state benefit program.

MN-PFML Applies to All Employers and Most Workers

Importantly, MN-PFML applies to all Minnesota employers, regardless of size.  This includes out-of-state employers with Minnesota employees.  It also includes non-profits, state and local government agencies, faith-based organizations, and other typically tax-exempt associations.

The only exceptions to MN-PFML coverage are for: (1) “independent contractors,” (2) “self-employed individuals,” (3) “federal government employees,” and (4) “seasonal employees.”

“Seasonal employees” are defined as “an individual who is employed for no more than 150 days during any consecutive 52-week period in hospitality by an employer whose average receipts during any six months of the preceding calendar year were not more than 33 percent of its average receipts for the other six months of such year.”

Types of Leave Available

There are six types of leave available under the MN-PFML:

1. 1. “Serious Health Condition” Leave
   2. “Pregnancy” Leave
   3. “Family Care” Leave
   4. “Bonding” Leave
   5. “Safety” Leave
   6. “Qualifying Exigencies” Leave

Employers must provide leave to employees after 90 calendar days of employment and employees are entitled to continued health insurance and reinstatement after the conclusion of their leave.

Paid Leave Benefits

The maximum length of benefits is 20 weeks per year.  An employee can receive a maximum of 12 weeks of paid leave for a “serious health condition,” which includes “medical care related to pregnancy,” or 12 weeks of paid leave for any of the other types of leave (family care, bonding, safety, and qualifying exigencies), but the benefits max out at 20 weeks per year.

Payment of leave benefits will be administered by the Family and Medical Benefits Division of DEED.  Employees will apply for benefits directly from the state.  The application process is modeled after the unemployment statute.  Benefits are paid weekly and there is a formula for calculating the weekly benefit amount under the program.  Currently, weekly benefits are capped at a maximum of the state’s average weekly wage (i.e., $1,287 for 2023).

An applicant cannot receive benefits for any portion of a week they are receiving vacation, sick, or personal leave.  But, this prohibition does not apply to “supplemental benefit payments,” which an employer provides as salary continuation or as paid time off to supplement MN-PFML benefits.  An applicant is ineligible for benefits for any portion of a week the applicant is receiving workers compensation benefits or separation, severance, or bonus payments.

Protection Against Discrimination, Retaliation, and Interference

The MN-PFMLA statute includes protections against discrimination, retaliation, and interference.  Penalties range from $1,000 to $10,000 per violation and employees can pursue court actions with remedies including double damages plus attorneys’ fees.  The statute also expressly authorizes class actions under state law.

Private Insurance Plans

The MN-PFML allows employers to substitute a “private plan” that has been approved by the commissioner of DEED.  The plan must provide the same or better benefits to employees and the cost of the benefits to employees would need to be the same.

Coordination with Other Leave Benefits

One of the trickiest aspects of the new law will be coordinating the law with existing leave protections.  Employers currently subject to federal FMLA would need to ensure that they are properly tracking and coordinating MN-PFMLA with federal FMLA.

It is possible that an employee could use 20 weeks of paid leave under the MN-PFMLA and then still be eligible for an additional 12 weeks of leave under the federal FMLA.  For example, after 90 days, a new employee would be eligible for up to 20 weeks of paid leave under the MN-PFMLA.  That same employee, in theory, could be eligible for 12 weeks of federal FMLA leave once they reach 1 year of service and 1,250 hours of service (since the earlier leave did not qualify as federal FMLA leave).

Bottom Line

There is much to digest with the new MN-PFMLA.  We are still reviewing the legislation and will follow up with posts and information for employers.  It is helpful that the benefits do not go into effect until January 1, 2026 because there are many unknowns regarding the program and employers will need time to plan and adjust their current suite of benefits.

We will continue to monitor this situation as it develops.

The post Legislature Passes Statewide Paid Family and Medical Leave Beginning January 1, 2026 appeared first on Felhaber Larson.

To become law, SF 3035 still needs Governor Walz’s signature.  But, he will undoubtedly sign the bill in the coming days and employers need to begin preparing for the substantial legal changes that are effectuated by the new law.

Statewide Paid Sick Leave (Effective January 1, 2024)

SF 3035 includes a new statewide requirement that employees accrue “earned sick and safe time” beginning on January 1, 2024.  The requirement mirrors the paid sick leave requirements in Minneapolis, St. Paul, and Bloomington, and applies to all employers with 1 or more employees.

Beginning on January 1, 2024, employees must receive at least 1 hour of ESST for every 30 hours worked, up to 48 hours per year.  Employees must be permitted to carryover up to 80 hours of ESST from one year to the next unless the employer “front-loads” 80 hours of ESST or pays out ESST at the end of the year.

Employees must be permitted to use ESST for: (1) the employee’s own illness, injury, health condition, or preventative care; (2) to care for a “family member” for the family member’s illness, injury, health condition, or preventative care; (3) leave related to domestic violence or personal safety issues for employee or “family member,” (4) certain business closures by order of a “public official”; and (5) the employee’s inability to work or telework because of health concerns related to the potential transmission of a communicable illness related to a public emergency.

Existing policies can comply with the new ESST requirement, provided that the policy meets or exceeds the accrual and use mandates set forth in SF 3035.  The bill also makes clear that it does not “preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard that provides for a greater amount, accrual, or use by employees of paid sick and safe time or that extends other protections to employees.”  Thus, employers in Minneapolis, St. Paul, Duluth, and Bloomington will likely have to comply with SF 3035 and their local ordinances if they provide greater protection to employees.

Near Total Ban on Non-Competes (Effective July 1, 2023)

SF 3035 also includes a near total ban on non-compete agreements in Minnesota.  The provision would be effective on July 1, 2023 and, as we previously reported, it would apply to both employees and independent contractors.  Non-competes are defined as:

[A]n agreement between an employee and employer that restricts the employee, after termination of the employment, from performing: (1) work for another employer for a specified period of time; (2) work in a specified geographical area; or (3) work for another employer in a capacity that is similar to the employee’s work for the employer that is party to the agreement.

The only exemption to this ban is for non-competes entered into in connection with the sale of a business or in anticipation of the dissolution of a business.

Importantly, SF 3035 does not include the following types of agreements in the definition of a “covenant not to compete”: (1) “a non-disclosure agreement, or an agreement designed to protect trade secrets or confidential information,” or (2) “a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.”  Therefore, these types of agreements would remain enforceable in Minnesota.

SF 3035 also provides that employees and independent contractors may recover their reasonable attorneys’ fees if required to enforce their rights under the non-compete law, and that employers cannot avoid the impact of this law by inserting a choice of law provision favoring the law of another state.

Finally, SF 3035 makes clear that the prohibition on non-competes “is effective July 1, 2023, and applies to contracts and agreements entered into on or after that date.”  Thus, non-compete agreements that were executed before July 1, 2023 would not be affected by the new law.

Pregnancy and Nursing Mothers Accommodations (Effective July 1, 2023)

SF 3035 also includes several amendments to the pregnancy accommodation and nursing mothers statutes.  For instance, SF 3035 makes the following revisions to Minn. Stat. § 181.939, subdivision 1:

(a) An employer must provide reasonable break times each day to an employee who needs to express breast milk for her infant child during the twelve months following the birth of the child. The break times must, if possible, may run concurrently with any break times already provided to the employee. An employer is not required to provide break times under this section if to do so would unduly disrupt the operations of the employer. An employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.

This significantly expands the rights for nursing mothers to take breaks to express milk for their babies, including those who are more than 12 months old.  Additionally, in subdivision 2, SF 3035 would add the following examples of pregnancy accommodations: “Reasonable accommodation may include but is not limited to temporary transfer to a less strenuous or hazardous position, temporary leave of absence, modification in work schedule or job assignments, seating, more frequent restroom breaks or longer break periods, and limits to heavy lifting.”

These changes to Minn. Stat. § 181.939 would be effective July 1, 2023.

Creation of a “Nursing Home Workforce Standards Board”

SF 3035 creates a “Nursing Home Workforce Standards Board.”  The board would “adopt rules establishing minimum nursing home employment standards that are reasonably necessary and appropriate to protect the health and welfare of nursing home workers.” This includes establishing initial standards for wages and working hours no later than August 1, 2024.

The board would be comprised of nine members. HHS and MN-DOLI would each designate one member. Employers and employees would be given three seats each to represent their interests as well. The governor would have to make these initial appointments no later than August 1, 2023. A simple majority vote would be needed for the board to take any binding action.

Prior to adopting minimum employment standards, the board would have to investigate industrywide market conditions to ensure standards meet or exceed existing conditions for a majority of workers. These standards would have to be reviewed at least once every two years.

Furthermore, the board would be empowered to certify worker organizations it deems qualified to provide training to nursing home workers and establish requirements for the curriculum used in these trainings. These training sessions would have to cover several topics, including the minimum working standards established by the board; antiretaliation protections granted by the bill; and information on how to report violations of workers’ rights to various regulatory entities. The board would have to review the adequacy of the curriculum at least annually.

Employers would have to ensure their employees attend a one-hour training session and would have to compensate workers for these sessions.

Other Provisions

The 276-page bill also includes numerous other revisions to Minnesota employment law, including:

• • Establishing new worker safety requirements in the warehouse industry and updating the Packinghouse Workers Bill of Rights;
  • Instituting strengthened wage protections for construction workers, including a requirement that a contractor entering into a “construction contract” shall be “liable for any unpaid wages, fringe benefits, penalties, and resulting liquidated damages owed to a claimant or third party acting on the claimant’s behalf by a subcontractor at any tier acting under, by, or for the contractor or its subcontractors for the claimant’s performance of labor”;
  • Changes to prevailing wage and certain construction contracts;
  • A ban on so-called “restrictive franchise agreements”;
  • Substantial modifications to the Public Employment Labor Relations Act, which governs collective bargaining and unionization rights in the public sector; and
  • A new prohibition on employers from compelling employee attendance at meetings that discuss religious matters, political issues, or arguments against unionization, which is likely preempted by the National Labor Relations Act.

Bottom Line

SF 3035 represents a substantial revision to employment laws in Minnesota.  While the law still needs to be signed by Governor Walz, he will undoubtedly sign the bill in the coming days and employers need to begin preparing for the substantial legal changes that are effectuated by the new law.

We will continue to monitor this issue as it develops.

The post MN Legislature Passes Statewide Paid Sick Leave, Non-compete Ban, and Much More appeared first on Felhaber Larson.

The legislation adds protections to the Minnesota Human Rights Act for “traits associated with race, including but not limited to hair texture and hair styles such as braids, locs, and twist.”  The law protects a person’s decision, free from discrimination, to wear their natural hair in the workplace and in school. It is intended to safeguard those whose natural hair styles have been treated as “unprofessional” or in violation of employers’ or schools’ dress code policies.  The new law will go into effect on August 1, 2023.

The law does not apply to unnatural colors such as pink or blue hair, for example, or supersede military or safety laws.

Bottom Line

Employers should review their policies and handbook to ensure they are broad enough to prohibit discrimination based on traits associated with race, such as natural hair and hair styles, including but not limited to braids, locs, and twists. Employers should also train their managers, human resources staff, and other employees involved in interviewing and hiring decisions on these policies regarding employees’ appearance.

If you have questions regarding this new law and/or your employment practices or policies, contact one of Felhaber’s employment attorneys.

The post Minnesota Passes Law Banning Hair Discrimination appeared first on Felhaber Larson.

The new protections were originally part of two separate bills: the Pregnant Workers Fairness Act (“PWFA”), which added protections for pregnant workers, and the Protections for Nursing Mothers Act (or “PUMP Act”), which added protections for nursing mothers.  But, after failing to pass as standalone bills, portions of the bills were added as amendments to the Consolidated Appropriations Act of 2023 and have been codified into law.

New Federal Protections for Pregnant Workers

As set forth in the Consolidated Appropriations Act of 2023, the PWFA provides that the following conduct by a covered employer constitutes “an unlawful employment practice”:

1. 1. not mak[ing] reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of a qualified employee, unless such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of the business of such covered entity;
   2. requir[ing] a qualified employee affected by pregnancy, childbirth, or related medical conditions to accept an accommodation other than any reasonable accommodation arrived at through the interactive process referred to in [section 101 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111)];
   3. deny[ing] employment opportunities to a qualified employee if such denial is based on the need of the covered entity to make reasonable accommodations to the known limitations related to the pregnancy, childbirth, or related medical conditions of the qualified employee;
   4. requir[ing] a qualified employee to take leave, whether paid or unpaid, if another reasonable accommodation can be provided to the known limitations related to the pregnancy, childbirth, or related medical conditions of the qualified employee; or
   5. tak[ing] adverse action in terms, conditions, or privileges of employment against a qualified employee on account of the employee requesting or using a reasonable accommodation to the known limitations related to the pregnancy, childbirth, or related medical conditions of the employee.

Covered employers include those employing 15 or more employees.  The PWFA incorporates many of the definitions from the ADA, including the “interactive process,” “undue hardship,” and “reasonable accommodation.”  However, the definition of “qualified employee” under the PWFA is defined to mean:

[A]n employee or applicant who, with or without reasonable accommodation, can perform the essential functions of the employment position, except that an employee or applicant shall be considered qualified if—

(A) any inability to perform an essential function is for a temporary period;

(B) the essential function could be performed in the near future; and

(C) the inability to perform the essential function can be reasonably accommodated.

The PWFA also includes discrimination and retaliation protections.

The PWFA will go into effect 180 days after enactment (i.e., June 27, 2023), and the EEOC must issue guidance no later than 1 year after the PWFA’s enactment.  Congress specifically instructed the EEOC to provide “examples of reasonable accommodations addressing known limitations related to pregnancy, childbirth, or related medical conditions.”

For employers in Minnesota, the requirements of the PWFA will not be new.  Remember, in Minnesota, employers with 15 or more employees are already required to provide “reasonable accommodations to an employee for health conditions related to pregnancy or childbirth upon request, with the advice of a licensed health care provider or certified doula, unless the employer demonstrates that the accommodation would impose an undue hardship on the operation of the employer’s business.”  Minn. Stat. § 181.939, subd. 2.  Minnesota law also requires covered employers to engage in the interactive process and provides that reasonable accommodations may include, but are not limited to, “temporary transfer to a less strenuous or hazardous position, seating, frequent restroom breaks, and limits to heavy lifting.”

Modified Federal Protections for Nursing Mothers

The Consolidated Appropriations Act of 2023 also included portions of the PUMP Act, which modifies (and somewhat expands) federal protections for nursing mothers.  Importantly, though, the modifications are not groundbreaking and, like the pregnancy accommodations, are not unlike existing protections under Minnesota law.

Specifically, the Consolidated Appropriations Act of 2023 removes the existing statutory language in 29 U.S.C. § 207(r) and inserts the following language in 29 U.S.C. § 218c:

(a)           IN GENERAL.—An employer shall provide—

(1) a reasonable break time for an employee to express breast milk for such employee’s nursing child for 1 year after the child’s birth each time such employee has need to express the milk; and

(2) a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.

(b)          COMPENSATION.—

(1) IN GENERAL.—Subject to paragraph (2), an employer shall not be required to compensate an employee receiving reasonable break time under subsection (a)(1) for any time spent during the workday for such purpose unless otherwise required by Federal or State law or municipal ordinance.

(2) RELIEF FROM DUTIES.—Break time provided under subsection (a)(1) shall be considered hours worked if the employee is not completely relieved from duty during the entirety of such break.

(c)     EXEMPTION FOR SMALL EMPLOYERS.—An employer that employs less than 50 employees shall not be subject to the requirements of this section, if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.

Like the old federal statute, “reasonable break time” is required only during the first year after the child’s birth.  The law also makes clear that it does not preempt state or local laws that offer employees great protection.  This portion of the Consolidated Appropriations Act of 2023 was effective on December 29, 2022.

Again, these protections are nothing new for employers in Minnesota.  Specifically, Minn. Stat. § 181.939, subd. 1 provides that all employers with 1 or more employees must “provide reasonable break times each day to an employee who needs to express breast milk for her infant child during the twelve months following the birth of the child.”  The law makes clear that, “if possible,” the break times must “run concurrently with any break times already provided to the employee.”  Minnesota law also provides that “[a]n employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.”  Under Minnesota law, the location offered by the employer should also include access to an electrical outlet: “The employer must make reasonable efforts to provide a room or other location, in close proximity to the work area, other than a bathroom or a toilet stall, that is shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet, where the employee can express milk in privacy.”

Bottom Line

As you can see, the Consolidated Appropriations Act of 2023 includes new federal protections for pregnant women and nursing mothers.  However, these new requirements are similar to existing requirements in Minnesota.  Thus, employers are reminded that these federal protections are in addition to – and not in lieu of – state and local laws that provide greater protections.

We will continue to monitor this issue as it develops.

Editor’s Note: A prior version of this post mistakenly referenced that nursing mother breaks were required for 2 years after the birth of the child.  

The post Congress Adds Federal Protections for Pregnant Workers and Nursing Mothers appeared first on Felhaber Larson.

Background

In January 2020, Minnesota legalized “industrial hemp” and CBD products, provided they contained less than 0.3% of delta-9 tetrahydrocannabinol (or “THC”).  Because the Minnesota statute expressly referenced “delta-9,” it was unclear whether the legal threshold applied to other THC analogs, such as delta-8 and delta-10.

Effective July 1, 2022, Minnesota amended its law to apply the 0.3% THC limit to all forms of hemp-derived THC. In addition, the new Minnesota law authorized the production of “edible cannabinoid products,” provided that the products meet the following requirements: (1) they do not contain more than 0.3% of any hemp-derived THC and (2) they do not contain more than 5 mg of THC per serving or more than 50 mg of THC per package.

FAQ:  What’s this new law all about?

A:  Effective July 1, 2022, Minnesota enacted a law which allows small amounts of hemp-derived THC (either delta 8 or delta 9) products in food and beverages. How much THC?  No more than 0.3% of any hemp-derived THC and the product may not contain more than 5 mg of THC per serving or 50 mg per package.

FAQ:  Does this law make recreational marijuana usage legal?

A:  No, it does not. This law permits the use of THC that is derived from hemp, not the marijuana plant.

FAQ:  Does this new law allow products to be sold that make the purchaser (including employees) “high”?

A:  Yes, probably. According to “Nothing But Hemp,” consuming “an edible with 5 mg of THC is generally enough to notice mild to moderate effects.” Notably, the law does not limit the number of 5 mg edibles that can be consumed, so presumably someone who consumes multiple edibles will become “high.”

FAQ:  Can ingestion of food or beverages containing hemp-derived THC product cause a positive on a drug screen?

A:  Yes, they possibly might.

FAQ:  Why can’t you give a straight answer?

A:  Whether an individual who ingests the products Minnesota just made lawful could test positive will depend on a number of factors, including: (a) the dose of THC in the product consumed, (b) the frequency with which the individual is consuming products containing THC, and (c) the type of drug test performed and its sensitivity levels.

Under the new law, employees can consume “edibles” that contain as much as 0.3% of THC in packages with as much as 50 mg of THC per package.  In addition, there is no limit on the number of packages that can be sold to an individual consumer.  Thus, it is certainly possible that consumption of “edible cannabinoid products” by an employee could produce a positive test result, especially if the individual was consuming the product regularly or consuming more than the intended serving.

FAQ:  Can a drug screen tell the difference between illegal drug use (smoking or ingesting non-medical marijuana, which is illegal in Minnesota and under federal law) and the use of the products that are lawful under Minnesota law, including edibles under the statute or even medical marijuana?

A:  At this time, it does not appear that most regular drug screens (an immunoassay test, saliva or hair test) can tell the difference between lawful use and unlawful use.

FAQ:  We have a drug and alcohol testing policy for applicants and reasonable suspicion training for our employees. What should we be doing?

A:   You should review your drug and alcohol testing policy and your policy statement to ensure it’s up to date.  Consider the following:

• • Have you addressed the Minnesota Medical Marijuana statute in your current policy? If not, you need to. Make sure that you’ve carved out the off-duty use of medical marijuana and make it clear that employees who are authorized to use and possess medical marijuana, are still prohibited from using medical marijuana at the work site or during work hours, possessing medical marijuana at the work site or during work hours, or being impaired by medical marijuana while at work.
  • Look at your definition of “illegal drugs” and “under the influence” to see if your policy covers the use of intoxicating lawful drugs such as the “edible cannabinoid products” permitted by the new Minnesota statute. As an employer, you are permitted to prohibit employees from use of, possession of, or being under the influence at work of any product – lawful or unlawful — which may impair an employee’s ability to work. Being under the influence at work could include being under the influence of “edible cannabinoid products.”
  • For employees who are truck drivers subject to the DOT’s and FMCSA’s regulations, Minnesota’s new law does not excuse those employees from their obligation to comply with FMCSA’s drug testing regulations which continue to screen for any type of marijuana and THC.

FAQ:  What do I do if one of my employees tests positive test for THC and claims it’s because of the edibles available under the new law?

A:  For now, we are taking the position that a positive test for THC is a positive test for THC regardless of how the employee came to test positive. Minnesota employers subject to DATWA do not have to specifically address the level at which an applicant or employee is considered to have a positive test. Therefore, let your MRO or the lab tell you whether the employee is positive. As Minnesota employers know, every employee who has a confirmatory positive must be given a chance to explain the positive. An employee may try to explain that the positive test resulted from lawful use of “edible cannabinoid products” under this new Minnesota law – not marijuana. If so, it is important to have the MRO evaluate the situation on a case-by-case basis and the employee can request a confirmatory test (at their own expense) which may be able to differentiate between the type of THC in their system.

FAQ:  Can an employer terminate an employee who tests positive on a drug screen as a result of lawful off-duty consumption of edibles?

A:  Not immediately. Under Minnesota DATWA, any employee who tests positive for the first time is given an opportunity for a chemical dependency assessment, and if it is recommended, to go participate in a drug counseling or rehabilitation program. DATWA does not permit termination of an employee if they agree to the assessment and treatment, if recommended. If the employee refuses or fails to participate in the assessment or program, they can be terminated. An employee who receives a second positive drug test may be terminated.

FAQ:  You didn’t understand the question, can an employer terminate an employee who tests positive following off-duty use of edibles? Doesn’t Minnesota have a Lawful Consumable Products statute which allows an employee to engage in “the use or enjoyment of lawful consumable products (including alcohol or tobacco), if the use or enjoyment takes place off the premises of the employer during nonworking hours?” 

A:  Good question. Another court looking at this issue concluded that an employer may terminate for off-duty use of THC because even though the use of the THC was authorized by state law, it was not authorized by federal law. However, this decision becomes more complicated because the 2018 Federal Farm Bill legalized hemp-derived THC, so presumably use of that form of THC is legal under both federal and now Minnesota law.  However, in 2021, the Minnesota legislature attempted to amend the Lawful Consumable Products statute to reference cannabis, but the bill did not pass. This fact alone might give an employer a good argument that THC edibles are not included in the Lawful Consumable Products statute. At this point, it will likely be a question for the courts.

Bottom Line

As you can see, there still are many unanswered questions regarding Minnesota’s new law authorizing “edible cannabinoid products.”  We will continue to monitor this issue as it unfolds.

The post FAQs Regarding Minnesota’s New THC Edibles Law appeared first on Felhaber Larson.

The Basics – Accrual and Use

The Bloomington SSL Ordinance mostly follows the Minneapolis and St. Paul ordinances, and requires employees to accrue at least 1 hour of SSL for every 30 hours worked in the City.  Employees must be permitted to accrue at least 48 hours of SSL each year and must be allowed to carry-over at least 80 hours of unused SSL from one leave year to the next.  A last minute amendment to the SSL Ordinance provided that employers with fewer than 5 employees must provide employees with SSL, but the time may be unpaid.

The Bloomington SSL Ordinance also tracks other sick leave ordinances and allows employees to use accrued and unused SSL for a host of reasons relating to the employee’s medical condition and the medical condition of the employee’s “family member.”  It also allows usage for certain closures, including the closure of a family member’s “school or place of care.”

Potential Exemption for Current Leave Policies

Like the ordinances in Minneapolis, St. Paul, and Duluth, the Bloomington SSL Ordinance provides an exception for existing policies, provided that they meet the accrual and use requirements set forth in the ordinance.  Thus, Bloomington employers with generous leave policies may still need to update their policies before July 2023.

Bottom Line

While the final ordinance (including two last-minute amendments) still needs to be drafted, employers with workers in the City of Bloomington needs to prepare for paid sick leave in 2023.  Remember, too, that nothing prevents other cities in Minnesota from adopting similar ordinances.

We will continue to monitor this issue.

The post Bloomington Mandates “Sick and Safe Leave” Beginning July 1, 2023 appeared first on Felhaber Larson.

Nursing-Mother Breaks

As we previously reported, effective January 1, 2022, Minnesota’s nursing mothers statute (Minn. Stat. § 181.939 Subd. 1) now requires that employers provide, “reasonable break times each day to express breast milk for her infant​ child . . . .”  The amendment also removes the provision stating that the breaks may be “unpaid” and notes that “an employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.”  Finally, the amendment expressly limits its application to “the twelve months following the birth of the child.”

Unlike the pregnancy accommodation statute, the nursing mothers statute applies to all employers, regardless of size.  Further, employers should note that nursing mothers are now entitled to reasonable break times throughout the day, suggesting that nursing mothers be given multiple breaks throughout the day, when the breaks will not “unduly disrupt” the employer’s business operations.

Another major change to the law is that breaks must now be paid.  Employers should ensure they modify their payroll practices accordingly and notify nonexempt employees that they do not need to clock out for time spent expressing breast milk.

Pregnancy Accommodations

We also previously reported that, starting on January 1, 2022, employers with 15 or more employees are required to provide:

reasonable accommodations to an employee for health conditions related to pregnancy or childbirth upon request, with the advice of a licensed health care provider or certified doula, unless the employer demonstrates that the accommodation would impose an undue hardship on the operation of the employer’s business

Minn. Stat. § 181.939 Subd. 2.

The pregnancy accommodation law previously applied to employers with 20 or more employees, and only applied to employees who worked at least half-time for one year.  Now, smaller employers are covered and there is no minimum work period required.

Reasonable accommodations, per the statute, may include, “temporary transfer to a less strenuous or hazardous position, seating, frequent restroom breaks, and limits to heavy lifting.”  Pregnant employees are not required to provide documentation from a health care provider or doula to justify the need for more frequent breaks, seating, or lifting limits.  However, for any other accommodation, the employer and employee should engage in the interactive process to determine what accommodation would best allow the employee to continue their job.

Finally, employers should note that they are not required to create a new position for a pregnant employee, nor are they required to terminate or transfer another, more senior employee, or give a promotion.

Employers with 15 or more employees will want to ensure they are aware of these new requirements and may want to update any existing accommodations-related policies.

New Minimum Wage

As a reminder, back in 2014, Minnesota’s minimum wage statute (Minn. Stat. § 177.24) was amended to provide scheduled, annual minimum wage increases through 2016.  Then, beginning in 2017, the commissioner of the Department of Labor and Industry was tasked with determining “the percentage increase in the rate of inflation” to fix the minimum wage for the following year, effective each year on January 1.  As of January 1, 2022, Minnesota’s minimum wages are as follows:

Minneapolis and St. Paul employers should also note that municipal minimum wages are set to increase on July 1, 2022.

Employers should examine their payroll process and ensure that nonexempt employees are earning the correct hourly wages.

Bottom Line

January 1 of every year is a great time to review recent law changes and update all impacted policies and procedures.  It may also be prudent to train managers on the changes relating to nursing mothers to ensure lactation breaks and pregnancy accommodations are provided in accordance with the statute.

The post New Year: New Laws. What Every Minnesota Company Needs to Know appeared first on Felhaber Larson.

While the changes were small, the amendments clarify and expand the protections afforded to pregnant and nursing mothers in Minnesota.  Governor Walz signed the bill into law last week and the expanded workplace protections for pregnant and nursing mothers go into effect on January 1, 2022.

Employers Must Provide “Reasonable Break Times” for the 12 Months following Birth

Minnesota’s nursing mothers statute (Minn. Stat. § 181.939) was first enacted in 1998.  As originally enacted, the law provided “reasonable unpaid break time” for nursing mothers to “express breast milk for her infant child.”  However, unlike the federal statute, which was passed in 2010 and limited the break times for the first 12 months following birth, the Minnesota statute included no temporal limitation.

In amending the statute, the Minnesota Legislature made clear that employers must provide “reasonable break times [note the plural] each day to express breast milk for her infant​ child . . . .”  The amendment also removes the provision stating that the breaks may be “unpaid” and notes that “an employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.”  Finally, the amendment expressly limits its application to “the twelve months following the birth of the child.”

Here is the amendment in full:

(a) An employer must provide reasonable unpaid break time times each day to an employee who needs to express breast milk for her infant child during the twelve months following the birth of the child. The break time times must, if possible, run concurrently with any break time times already provided to the employee. An employer is not required to provide break time times under this section if to do so would unduly disrupt the operations of the employer. An employer shall not reduce an employee’s compensation for time used for the purpose of expressing milk.

2021 Minn. Laws ch. 10, Art. 3, § 3 (S.F. No. 9) (available here).

Although narrowed to the first 12 months following the child’s birth, the amended statute makes clear that employees must be provided with access to multiple breaks (i.e., “reasonable break times”) to express milk and, while the breaks may run concurrently with unpaid break times, they must not cause the employee to lose any compensation.

WESA Pregnancy Accommodations Expanded to All Employees Working for Employers with 15 or More Employees

In 2014, Minnesota passed the Women’s Economic Security Act (or WESA).  WESA created Minn. Stat. § 181.9414, which required employers to provide accommodations to pregnant workers, including (1) more frequent restroom, food, and water breaks; (2) seating; and (3) limits on lifting over 20 pounds.  Our blog post regarding the WESA amendments is available here.  The problem, however, was that it was codified as part of the Minnesota Parental Leave Act (MPLA), which has a narrow definition of “employer” and “employee.”  Thus, the accommodation requirement was arguably limited to employers with 20 or more employees and “employees” who had worked for at least half-time for one year.

The Minnesota Legislature broadened the application of the pregnancy accommodation statute by moving the statutory text from Minn. Stat. § 181.9414 to a new subdivision under the Minnesota’s nursing mothers statute (Minn. Stat. § 181.939).  Given that there is no definition of “employee” in the nursing mothers statute, courts will likely apply the broadest possible definition of that term.

While the 2021 Legislature did not alter the text of the 2014 WESA accommodation statute, it did add a definition of “employer,” which limits its application to employers with 15 or more employees.  The definition, though, is limited to the WESA accommodation portion of the statute (Minn. Stat. § 181.939, subd. 2) and does not apply to the nursing mothers portion of the amended statute (Minn. Stat. § 181.939, subd. 1).  As a result, while the pregnancy accommodation requirement is limited to employers with 15 or more employees, the requirement to provide breaks to nursing mothers for the first 12 months following birth of a child applies to all employers (regardless of size).

Bottom Line

As you can see, while not groundbreaking, the 2021 amendments to the nursing mothers statute (Minn. Stat. § 181.939), which now include the WESA pregnancy accommodations, broaden the protections for pregnant and nursing mothers.  Remember, the amendments go into effect on January 1, 2022, so employers would be well-served to have this on their list of “to dos” for 2022.

CORRECTION: A previous version did not note the revised definition of “employer” (i.e., 15 or more employees) for the WESA pregnancy accommodations.

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As we reported back in 2017 (Minneapolis Passes Phased-In $15.00 Minimum Wage), the City of Minneapolis passed a minimum-wage ordinance requiring employers to pay Minneapolis workers $15.00 per hour.  The ordinance allowed for the requirement to be phased in through 2022 (for large employers) or 2024 (for smaller employers).  The ordinance applies to all time worked by any employee working two or more hours per week within the geographic boundaries of Minneapolis, even if the employer is not physically located in Minneapolis.

What the Court Said

The Court noted that cities have broad powers to regulate their affairs so long as their actions do not conflict with the Federal or State constitution, or with state statutes.  In finding that the City’s ordinance was not preempted by state law, the court relied heavily on the text of the Minnesota Fair Labor Standard Act (“MFLSA”), which requires employers to pay “at least” the wages set forth in the statute.  By using the phrase “at least,” the court reasoned that the Minnesota Legislature “clearly contemplate[d] the possibility of higher hourly rates.”  Thus, the court concluded, cities like Minneapolis are not precluded from setting a higher rate than what is set forth in the state statute.

Importantly, the court’s decision does not settle whether the similar issue of whether Minneapolis’ sick leave ordinance is a valid exercise of municipal authority or whether it is preempted by state law.  That appeal is still pending, although both cases were argued on the same date (October 1).

Bottom Line

With a Minnesota Supreme Court decision allowing cities to implement their own minimum wage regulations, we might see this trend spread to other municipalities throughout the state.  Stay tuned.

The post Minnesota Supreme Court Upholds Minneapolis Minimum Wage Ordinance appeared first on Felhaber Larson.

Thus far, the courts have mostly declined to find a protected relationship between particular hair styles and racial/ethnic identity but an increasing number of states and municipalities are now enacting laws banning hairstyle discrimination.

Courts Mane-ly on Employer’s Side

A quick internet search reveals countless news stories, blogs and other personal accounts of African American employees (most often female) being fired from their jobs because of concerns about their hair.  In some instances, the employee was told that natural hair looked unprofessional or unkempt.  In other situations, women with dreadlocks or ornately decorated braids heard that their hair style was too elaborate or distracting for the workplace.  Some who chose to wear their hair in a tight bun were directed to change their hair because helmets or other protective wear would not fit properly.

With increasing frequency, employees in these situations have been going to court to claim that their hairstyles are intrinsically associated with their race or ethnicity.  They argue that treating them differently and adversely because of their hairstyles therefore amounts to illegal race discrimination.

To date, courts have analyzed these claims in a very cut-and-dried manner that mostly favors employers. In perhaps the most oft-cited case on this arena, the 11^th Circuit Court of Appeals ruled in 2016 for an employer who withdrew a job offer from an applicant who declined to observe their “no dreadlocks” policy.  The court undertook a lengthy discussion on the difficulty of discerning between race as a biological construct versus a cultural identity, and eventually concluded that while Title VII protected immutable physical characteristics such as skin color and hair texture,  it did not apply to choices or chosen practices.

Thus, while an Afro hairstyle might be a protected characteristic because it is the natural way in which an African American person’s hair grows, the decision to style that hair into braids, dreadlocks, hair weaves, etc. is not.

New Laws Crop Up

In 2019, California became the first state to pass a law prohibiting hairstyle discrimination.  The new CROWN (Create a Respectful and Open Workplace for Natural Hair) Act was enacted to define “race”, for purposes of anti-discrimination laws, to include “traits historically associated with race, including, but not limited to, hair texture and protective hairstyles.” This new definition explicitly includes “braids, locks, and twists.”

Shortly thereafter, the States of New York and New Jersey passed a nearly identical law, and legislatures in various other states (e.g. Kentucky, Michigan, Tennessee, and Wisconsin) have introduced their own variations for consideration.  Moreover, some big cities, such as Boston and Cincinnati, have joined the movement in enacting local ordinances banning hairstyle discrimination, and many more are said to be considering doing so as well.

Grooming and Dress Code Policies to Dye For

Although Minnesota has not (yet) enacted an explicit hairstyle discrimination law, winning a hairstyle discrimination case here is not a lock.  Applying grooming standards in an unequal manner can still result in a valid claim of race discrimination. Therefore, Minnesota employers should review their grooming policies and dress codes as follows:

→ Watch for inherently discriminatory standards. Banning dreadlocks or weaves while allowing elaborate Dutch or French braids could be seen as favoring White employees, whose hair is more amenable to such styles.

→ Reevaluate terms such as “neat”, “extreme” and especially “professional.” These are highly subjective concepts which could result in the manifestation of implicit bias.  How can one objectively measure whether a long Afro is more extreme than neon pink hair or an elaborate perm?  Why is a white male’s curly hair more professional than an African American male’s natural hair of the same length?

→ Consider whether there is a viable reason behind the particular restriction, particularly in non-customer service positions.  An employer who simply says “I don’t think dreadlocks are a good look” may have difficulty defending a claim of discriminatory application of the grooming policy without a more definable and work-related rationale.

Bottom Line

While only a few jurisdictions have enacted hairstyle discrimination bans thus far, this seems like an idea that is growing in popularity. Now is the time to brush up your grooming and dress policies to be sure that they are styled correctly.

The post Hairstyle Discrimination Laws May Be the Coming Wave appeared first on Felhaber Larson.

The Minneapolis ordinance is effective January 1, 2020, and employers with employees working at least 80 hours in Minneapolis (including employers based outside the city limits) must comply by then.

Who Must Comply with the Minneapolis Ordinance on January 1, 2020?

Any employer that employs an employee (including temporary or part-time) working within the geographic boundaries of the City of Minneapolis for 80 hours or more per year must comply with the new Minneapolis ordinance.

This includes not only employers based in Minneapolis but also, according to a recent court decision, those employers not based in Minneapolis but whose employees spend at least 80 hours per year working in the city.

What Does the Minneapolis Ordinance Require?

The Minneapolis ordinance prohibits “wage theft,” requires employers to provide employees with “pre-hire notices” (as well as “supplemental notices”), and requires employers to provide employees with certain “statement of earnings” after each pay period.

What is Different About the Minneapolis Pre-Hire Notice and Supplemental Notice?

With respect to the pre-hire notice, Minneapolis requires that, in addition to all the required information under the new state law, the pre-hire notice must include the following information:

∗ The date on which employment is to begin (unless the start date cannot be determined ahead of time despite reasonable diligence).

∗ Notice of the employee’s rights under the Minneapolis Sick and Safe Time (“SST”) ordinance (or notice about the employer’s sick leave, paid time off, or other PTO policy meeting SST ordinance requirements), which must include the following elements: (1) the method of accrual; (2) the date upon which the employee is first entitled to use accrued Sick and Safe Time (which must be no later than 90 days following start date), and (3) the date upon which the employer’s year for the purpose of Sick and Safe Time accrual (or frontloading) begins and ends (i.e., the “benefit year”).

∗ For non-exempt employees, the overtime policy applicable to the employee’s position, including the rate or rates of pay and the threshold number of hours worked that qualifies an employee to earn overtime pay for any additional hours worked during that workweek.

∗ Where applicable, a statement that tip sharing is voluntary, per state law.

Like the state law, the Minneapolis ordinance requires an employer to provide notice of “any changes to the information contained” in the original pre-hire notice. However, the Minneapolis law also requires that the supplemental notice be (1) acknowledged in writing by the employee (i.e., the supplemental notice must be signed by the employee) and (2) the notice must be provided to the employee before the changes take effect. The only exception to the signature requirement is for a wage increase if the employee received notice, in advance of the increase, of the amount and date of the increase.

The City has developed a sample prehire notice.

What About Current Employees?

Unlike the Minnesota statute, the Minneapolis ordinance requires that employers provide the same notice to all current employees on or before the first pay period of 2020. The only exception is if the employer previously provided the required information. According to an FAQ issued by the City:

Q: Are employers required to provide current employees with the prehire notice?

A: Yes, current employees are covered by the ordinance as of its effective date of January 1, 2020. Any current employee, as of January 1, 2020, who did not previously receive all the required information (including notice of the employer’s sick leave, paid time off, or other time off policy which meets Sick and Safe Time ordinance requirements) must be provided with a pre-hire notice no later than during the first full pay period of 2020. Current employees who were already provided with all of the information required by the prehire notice (even if it was not all provided in a single notice) do not need to receive the information a second time.

This means that if you did not provide a wage notice to your current employees under state law (i.e., those hired before July 1, 2019), then you need to provide the notice to any employees working in Minneapolis on or before the end of the first full pay period of 2020.

Is There a Physical Poster That Needs to be Posted?

Yes, it is part of a combined poster giving employees notice of their rights under the City’s minimum wage ordinance, sick and safe time ordinance, and wage theft ordinance.

In addition to physically posting the notice, the Minneapolis ordinance also requires that the employer provide each new employee with a copy of the city’s notice poster. According to FAQs from the city, new employees must also receive a copy of the notice in “in electronic or printed form . . . no later than the first date on which the employee begins performing work for the employer.”

What is Different About the Required “Statement of Earnings”?

In addition to the information that is required by state law, the Minneapolis ordinance also requires that employers provide “the number of hours of Sick and Safe Time accrued and used by the employee.”

If an employer is using PTO or another paid leave policy to comply with their obligations under the Minneapolis SST ordinance, then it is advisable to provide the PTO balance on the statement as well as the number of hours used for the year. Then, if the employer assumes that the first 48 hours in the first year (and 80 hours every year thereafter) is SST, the employer will be in compliance with this element of the ordinance.

Can I Provide the Pre-Hire Notice, Supplemental Notice, and Statement of Earnings in Electronic Form?

Yes, employers may provide earning statements electronically if employees have access to a computer and time during work hours to review and print the notices and statements. However, the Minneapolis ordinance provides that employees have a right to request and receive these documents in paper format.

Bottom Line

Employers with employees in Minneapolis must take immediate action in order to comply with the new Minneapolis wage theft ordinance by January 1. There is no more time to wait!

The post What EVERY Employer Must Know About the Minneapolis Wage Theft Ordinance by January 1st appeared first on Felhaber Larson.

The new Minneapolis ordinance mirrors Minnesota’s new state law by requiring employers to (1) designate a regularly scheduled payday; (2) provide employees with “pre-hire notices” of employment terms and conditions; and (3) provide earnings statements at the end of each pay period.

Ordinance Goes Farther Than State Law

The Minneapolis ordinance goes further, however, by requiring employers to include an employee’s current balance of available sick and safe time (SST) hours on all earnings statements. The ordinance also requires the following information to be included on “pre-hire notices,” in addition to state law requirements:

• The date when employment begins;
• A notice regarding SST rights;
• A statement that tip sharing is voluntary under state law (where applicable); and
• The overtime policy applicable to the employee’s position (if any), including when overtime shall be paid and the applicable rate or rates of pay.

While employers may provide earning statements and pre-hire notices in electronic format, the ordinance provides that employees have a right to request and receive these documents in writing if they desire.

The new ordinance also incorporates state standards regarding overtime, meal breaks, and rest breaks.  This allows the city to pursue relief on behalf of the employee rather than turning the case over to state officials.

Finally, the ordinance provides for the publication of a list of entities with “outstanding wage obligations,” including unpaid relief to employees or fines.  Organizations that appear on the list are barred from entering into contracts or bonds with the city and are at risk of losing their city license.

The Minneapolis Civil Rights Department will enforce the ordinance beginning Jan. 1, 2020.  We can expect FAQs and other administrative guidance from the City in advance of the effective date.

Bottom Line

Everyone seems to be jumping on the Wage Theft bandwagon.  We will continue to monitor this story as it develops.

The post Minneapolis Passes Its Own Wage Theft Law appeared first on Felhaber Larson.

The requirements of this new law can be divided into three categories: (1) the written Wage Notice that must be provided; (2) the written Wage Statement to employees, and (3) the additional information that must be included in employee wage records to stay in compliance with state recordkeeping requirements.

The Wage Notice – New Employees

As we explained in our piece entitled New Employer Recordkeeping Requirements Now Set to Take Effect July 1st – Are You Ready?, Minnesota employers must now provide a “Wage Notice” to new employees at the beginning of their employment starting July 1, 2019. The Minnesota Department of Labor and Industry (MNDOLI) has now issued a sample employee notice form that can be used for this purpose.

Note that the law requires that “an employer . . . provide the employee any written changes to the information contained” in the required wage notice before the date the changes take effect.

The Wage Notice – Current Employees

MNDOLI has also issued a Q&A that reminds employers that they need not provide the Wage Notice to current employees but they consider it a best practice to do so. Moreover, the Q&A confirms that when the Wage Notice is provided to a current employee (because there is a change to the current employee’s conditions in regard to information covered by the Wage Notice), that first notice must include all of the items required to be provided to new employees in the Wage Notice.

In addition, the first written notice to current employees must include the text prepared by MNDOLI that informs employees they may request, by indicating on the form, that the written notice be provided in a particular language and, if requested, the employer must provide the written notice in the language requested.

The Q&A also explains that the Wage Notice requirements may not be met by issuance of an employee handbook or union contract since (a) those documents might not contain the specific information required for the individual employee; and (b) they do not contain the required language about the right to have the notice translated.

Employee Acknowledgement of the Wage Notice

The Wage Notice amendments require that new employees acknowledge receipt of the Wage Notice. Thereafter, if there are changes in the required information, written acknowledgements are not required but MDOLI again says that “it would be a good practice to do so.” Importantly, the statute makes clear that the subsequent Wage Notice must be provided “before the changes go into effect.”

For current employees, while the statute does not clearly provide that acknowledgement is required, the Q&A states that when an employer sends current employees the first written wage notice, “the written notice should be signed by employees acknowledging receipt.” Presumably, once the first complete written notice goes out to current employees, like with new employees, there is no need to acknowledge subsequent changes “although it would be a good practice to do so.”

The new legislation does not address whether the wage notice can be provided in electronic form (e.g., via email) and/or signed electronically.  However, the Minnesota Electronic Transactions Act makes clear that “if a law requires a record to be in writing, an electronic record satisfies the law” and “if a law requires a signature, an electronic signature satisfies the law.”

The Wage Statement

The Minnesota Required Statement of Earnings Statute, section 181.032, was also amended to expand the information that must be provided on the “required statement of earnings” statement. This new information that must be provided includes “Rates of pay and basis thereof including whether the employees paid by the hour shift, day, week, salary, piece commission or other method, and the specific application of any additional rules” and “Allowances if any, claimed pursuant to permitted meals and lodgings.”

In regard to how the wage statement is to be provided:

• An employer who chooses to provide an earnings statement by electronic means must provide an employee access to an employer-owned computer during an employee’s regular working hours to review and print earning statements;
• An employer must provide earnings statements to an employee in writing, rather than by electronic means, if the employer has received at least 24 hours’ notice from an employee that the employee would like to receive earnings statements in written form, and
• Once an employer has received notice from an employee that the employee would like to receive earnings statements in written form, the employer must comply with that request on an ongoing basis.

Revisions to the Recordkeeping Requirements in the MFLSA

The third major component to the “Wage Theft” statutory amendments is the changes to the recordkeeping requirements of the Minnesota Fair Labor Standards Act (MFLSA).

By far the most challenging amendment to the recordkeeping requirements is the requirement that the employer recordkeeping requirements include a list of the personnel policies provided to the employee including (1) “the date the policies were given to the employee” and (2) “a brief description of the policies.”

How do employers record this information?

• If an employer obtains a “handbook acknowledgement” from employees each year (or each time the handbook is revised), an employer could update the acknowledgement to include a list of the policies that are included in the handbook (e.g. the table of contents).
• If policies are maintained in a separate place, then it is advisable to create an acknowledgment that includes a list of all of the policies (including a short description of each) and have employees acknowledge that they have received access to the policies.

In addition, unlike the amendments to the wage notice statute, there is nothing that limits the application of this provision to “new” employees (i.e., those hired after July 1, 2019).  This likely means that in order to be in compliance with the statute, employers are required to add this information to employer-required records for all current employees as well as all new hires.

Bottom Line

The effective date of this new law is just a few days away.  Hopefully the new sample form and the Q&A will help you get ready.

The post Wage Theft Statute Sample Notice Form, Q & A and a Few Helpful Tips Are Now Available appeared first on Felhaber Larson.

While the criminal components of the new law go into effect on August 1, 2019, as previously reported, the civil components actually take effect on July 1, 2019.  This is because the new bill includes monetary appropriations, which accelerates the effective date in accordance with Minnesota legislative rules.  As such, the time to gear for these new requirements is now!

This is not welcome news for employers since the new Wage-Theft Bill includes numerous new recordkeeping requirements that are far than clear.  Representatives from the Minnesota Department of Labor and Industry (“MN-DOLI”) have promised informal guidance (in the form of FAQs), but it is unlikely that they will have the opportunity to issue more complete administrative regulations before the law goes into effect.

Here is a quick summary of what Minnesota employers need to know about the portions of the law taking effect on July 1:

New Signed “Wage Notice” for Each Employee

Effective July 1, 2019, Minnesota law will require all employers to provide employees with a written “wage notice” that includes the following information “at the start of employment”:

(1) the rate or rates of pay and basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method, and the specific application of any additional rates;

(2) allowances, if any, claimed pursuant to permitted meals and lodging;

(3) paid vacation, sick time, or other paid time-off accruals and terms of use;

(4) the employee’s employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of chapter 177, and on what basis;

(5) a list of deductions that may be made from the employee’s pay;

(6) the number of days in the pay period, the regularly scheduled pay day, and the pay day on which the employee will receive the first payment of wages earned;

(7) the legal name of the employer and the operating name of the employer if different from the legal name;

(8) the physical address of the employer’s main office or principal place of business, and a mailing address if different; and

(9) the telephone number of the employer.

This notice must be signed by the employee and retained the employer.  The employer must also provide the written notice to an employee whenever anything in the original written notice changes prior to the date the changes take effect.

What does this mean for Minnesota employers?

Employers must create the required “wage notice” that includes all of the required information, and must issue it to all new employees hired on or after July 1.  The notice also must be provided to current employees if any of the information changes and must be provided prior to the date the changes take effect.

It is unclear whether the law requires the employer to provide the “wage notice” to current employees on July 1.  However, because the law specifies “at the start of employment,” it is unlikely that the law requires any notices to current employees on July 1, provided that none of the information specified in the statute has changed.

Are Electronic Notices and Signatures OK?

The law does not address whether the wage notice can be provided in electronic form (e.g., via email) and/or signed electronically.  However, the Minnesota Electronic Transactions Act makes clear that “if a law requires a record to be in writing, an electronic record satisfies the law” and “if a law requires a signature, an electronic signature satisfies the law.”

Therefore, it would seem that electronic notices are permissible under the new law.

Employers Must Keep a List of Personnel Policies Provided to Employees

Effective July 1, 2019, in addition to keeping copies of the “wage notice,” employers must keep a record of “a list of the personnel policies provided to the employee” and the record must include: (1) “the date the policies were given to the employee” and (2) “a brief description of the policies.”

What does this mean for Minnesota employers?

Just what it says – you must keep the required list of policies distributed to your employees.  Moreover, unlike the wage notice, there is nothing that limits the application of this provision to “new” employees (i.e., those hired after July 1, 2019).  Thus, it appears that this recordkeeping requirement could require some additional work with respect to current employees.

Employers that obtain a “handbook acknowledgement” from their employees each year (or each time the handbook is revised) will only need to update the acknowledgement to include a list of the policies that are included in the handbook (e.g. the table of contents).  If policies are maintained in a separate repository, then it is advisable to create an acknowledgment that includes a list of all of the policies (including a short description of each) and have employees acknowledge that they have received access to the policies.

What if our policies are contained on an intranet?

If this is the case, it is advisable to create an acknowledgment that includes a list of all the policies currently in the online repository and notifying employees how they can access them.  Then, the employees would acknowledge the constructive “receipt” of those policies (i.e., access to them via the web portal) and this should comply with the new law.  Again, we are expecting additional guidance from MN-DOLI.

Earnings Statements Must Include New Information

The law adds to information required on an employee earnings statement, which must be provided to each employee at the end of a pay period under Minn. Stat. § 181.032.  The new information required includes the basis of pay (hourly, salary, piece rate, etc.), any allowances for meals or lodging, and the address and phone number of the employer.

What does this mean for Minnesota employers?

Beginning on the first pay period after July 1, 2019, employers will need to make sure that their pay stubs include the new information required by the new law.

Bottom Line

While we anticipate additional guidance from MN-DOLI, many of the provisions of the new law go into effect on July 1 – less than three weeks from now! Employers must take steps immediately to prepare for complying with the new law.

We will continue to monitor this story as it develops.

The post New Employer Recordkeeping Requirements Now Set to Take Effect July 1st – Are You Ready? appeared first on Felhaber Larson.

Gov. Walz has indicated that he will sign the bill so it will become effective on August 1, 2019.  Here is what the new law will do:

Wage Theft

The new law will make it a crime to commit “wage theft.”  Wage theft is any of the following actions by an employer with “intent to defraud”:

• failing to pay an employee all wages, salary, gratuities, earnings, or commissions as required by federal, state, or local law;
• directly or indirectly causing any employee to give a receipt for wages for a greater amount than that actually paid to the employee for services rendered;
• directly or indirectly demanding or receiving from any employee any rebate or refund from the wages owed the employee; or
• making it appear in any manner that the wages paid to any employee were greater than the amount actually paid to the employee.

If the value of wage theft exceeds $35,000, a person may be sentenced to prison for up to 20 years, a fine of up to $100,000, or both.

The wage theft protections will apply to actions that occur on or after August 1, 2019.

Revised Recordkeeping and New “Wage Statements” Requirement

The new law includes several additional recordkeeping requirements for Minnesota employers as well as additional authority for the Minnesota Department of Labor and Industry (DOLI) to monitor compliance.

In addition, the bill creates a new “wage statement” that must be provided to employees in writing at the start of employment.  Employees must sign the wage statement and employers are required to keep a copy and provide a new notice if there are any changes.

• Additional Authority for DOLI to Investigate Violations

The bill amends Minnesota Statute 175.20 to allow the Commissioner of DOLI to enter the places of business of employers, during work hours, to investigate potential violations of chapters 177, 181, 181A, and 184.  The investigation authority includes the ability to collect various evidence of potential violations of law and to interview witnesses.

• Employers Must Keep Additional Records

The new law requires employers to keep additional employment records, including:

• (1) the basis of pay (hourly, salary, piece rate, etc.);
• (2) personnel policies provided to the employee, including the date the policies were given to the employee and a brief description of the policies,
• (3) a signed copy of the new “wage notice,” which must include certain information like wage rates, vacation, PTO, etc., and must be provided to all employees at the start of their employment as well as if any changes are made.

This section of the law also requires that all records be available for inspection and must be kept at the place where employees are working or kept in a manner that allows the employer to comply with any demand for inspection within 72 hours.  The law also creates a new maximum fine of $5,000 for repeat violations of DOLI Industry record keeping requirements.

• Retaliation Protections

The law adds additional retaliation protections for employees who assert rights under the Minnesota Fair Labor Standards Act, Minn. Stat. §§ 177.21 to 177.44, and certain provisions of the Minnesota Employment Code, Minn. Stat. §§ 181.01 to 181.723, or 181.79.

• Earnings Statements Must Include New Information

The new law adds to information required on an employee earnings statement, which must be provided to each employee at the end of a pay period under Minn. Stat. § 181.032.  The new information required includes the basis of pay (hourly, salary, piece rate, etc.), any allowances for meals or lodging, and the address and phone number of the employer.

• New Signed Wage Statement for Each Employee

The law also creates a new “wage statement” requirement.  Specifically, the law requires all employers to provide a new employee with written notice of the following “at the start of employment”:

• (1) the rate or rates of pay and basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method, and the specific 63.24 application of any additional rates;
• (2) allowances, if any, claimed pursuant to permitted meals and lodging;
• (3) paid vacation, sick time, or other paid time-off accruals and terms of use;
• (4) the employee’s employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of chapter 177, and on what basis;
• (5) a list of deductions that may be made from the employee’s pay;
• (6) the number of days in the pay period, the regularly scheduled pay day, and the pay day on which the employee will receive the first payment of wages earned;
• (7) the legal name of the employer and the operating name of the employer if different from the legal name;
• (8) the physical address of the employer’s main office or principal place of business, and a mailing address if different; and
• (9) the telephone number of the employer.

This notice must be signed by the employee and kept by the employer.  The law also would require an employer to provide written notice to an employee whenever anything in the original written notice changes.

• Earnings Paid Every 31 Days; Commissions Paid Every 3 Months

The new law amends Minnesota Statute 181.101 to specify that all earnings, including salary and gratuities, must be paid at least every 31 days.  In addition, the law requires that all earned commissions must be paid “at least once every three months.”

The law also removes the 15-day maximum penalty for an employer’s failure to pay wages upon an employee’s demand.  Specifically, the law as amended would provide for unlimited penalties after a 10-day notice period:

[I]f payment of wages is not made within ten days of service of the demand, the commissioner may charge and collect the wages earned at the employee’s rate or rates of pay or at the rate or rates required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater, and a penalty in the amount of the employee’s average daily earnings at the same rate or rates for each day beyond the ten-day limit following the demand.

A 1/15 penalty for earned but unpaid commissions after the 10-day notice period:

If payment of commissions is not made within ten days of service of the demand, the commissioner may charge and collect the commissions earned and a penalty equal to 1/15 of the commissions earned but unpaid for each day beyond the ten-day limit.

The law also makes clear that it provides a “substantive right to the payment of wages, including salary, earnings, and gratuities, as well as commissions, in addition to the right to be paid at certain times.”

Bottom Line

Employers must take steps to ensure that they comply with the new recordkeeping and wage statement provisions of the law.  The bill goes into effect on August 1, 2019, so employers should begin planning as soon as the bill is signed into law.

We will continue to monitor this story as it develops.

The post Minnesota Passes Sweeping Wage-Theft and Employer Recordkeeping Law appeared first on Felhaber Larson.

As a result, all employers (regardless of location) must permit employees to accrue SST if they perform at least 80 hours of work in Minneapolis.

Background

The Minnesota Chamber of Commerce challenged the Minneapolis ordinance in October 2016.  A Hennepin County Judge rejected the facial challenge to the law, but issued an injunction preventing the city from enforcing its ordinance “against any resident outside the geographic boundaries of the City.”

In 2018, the City amended the ordinance to address the court’s concerns about its geographic reach.  As amended, the ordinance provides that SST accrues only for hours an employee works “within the geographic boundaries of the city.”  Further, as amended, the ordinance provides that SST may only be used “when the employee is scheduled to perform work within the geographic boundaries of the city.”

Then, as we reported last year in Judge Says Mpls. Sick Leave Ordinance Cannot Be Enforced Against Non-Resident Employers, Hennepin County District Judge Mel Dickstein issued a final order finding that the Minneapolis ordinance was not preempted by state law, but permanently enjoining the city from enforcing its SST ordinance against “non-resident employers.”  Both parties appealed.

Court Finds Ordinance Valid, Even Against Non-Resident Employers 

On appeal, the court affirmed Judge Dickstein’s finding that the Minneapolis SST ordinance was not preempted by  state law.   The three key elements of this decision are:

⇒ First, the court concluded that the Minneapolis SST ordinance did not conflict with state law, including the Minnesota Sick Leave Statute, which requires employers to permit employees to use their sick-leave benefits to care for relatives who are ill or injured, an to use such benefits for “safety leave,” even if the employer’s policy does not permit such use.  The court noted that the Sick Leave Statute does not “mandate that sick leave be provided, much less require a certain number of leave days or that any part of that leave be paid.”

⇒ In addition, the court concluded that the ordinance was not impliedly preempted because it found that “the legislature did not intend to exclusively control the field of private-employer-provided sick-and-safe leave.”  The court found the Chamber’s concern about a “patchwork” of municipal SST ordinances “speculative, at best.”

⇒ Finally, the court reversed the district court’s decision finding that the Minneapolis SST ordinance had an impermissible extraterritorial effect.  That is, that it inappropriately regulated conduct outside the geographic boundaries of Minneapolis.  The court concluded that, as amended in 2018, the City’s ordinance did not have an impermissible effect: “Because the ordinance permits leave to accrue only when an employee works in the city and permits an employee to use her leave when scheduled to work in the city, the ordinance operates solely within the city.”

As a result, the court vacated the permanent injunction against the city enforcing the ordinance against employers located outside of the city.  This means that any employer (regardless of location) with employees performing work in Minneapolis for more than 80 hours will be required to comply with the ordinance.

Bottom Line

It was not surprising that the appeals court affirmed the validity of the Minneapolis SST ordinance since previous decisions had affirmed the City’s authority to issue such an ordinance.

The dissolution of the injunction, however, is noteworthy and very well could be appealed to the Minnesota Supreme Court.  We will keep track of that appeal if it happens, and of the possibility that the dissolution of the injunction might be stayed pending such appeal.  This may not be over just yet.

The post Appeals Court OK’s Applying MPLS Paid Sick Leave to Non-MPLS Employers appeared first on Felhaber Larson.

The majority of the Minnesota Court of Appeals disagreed, concluding that “the Ordinance is a valid exercise of the City of Minneapolis’s legislative power, and the district court did not err in declaring the Ordinance valid and enforceable.”

In his dissent, Judge Matthew E. Johnson argued that the Minneapolis ordinance should be preempted because it “forbids what the state statute expressly permits.”  That is, the Minneapolis ordinance prohibits employers from paying “hourly wages of between $9.86 and $11.24 for employees of large businesses and large employers.”

Bottom Line

Today’s decision means that employers with employees in Minneapolis must continue to comply with the ordinance’s minimum wage requirement: namely $11.25 for business with 100+ employees and $10.25 for employers with fewer than 100 employees.  Unless today’s decision is reversed by the Minnesota Supreme Court, on July 1, 2019, these rates will increase to $12.25 and $11.00 respectively.

The post Divided Minnesota Appeals Court Upholds MPLS $15 Minimum Wage appeared first on Felhaber Larson.

New $15 Wage to Be Phased In

St. Paul’s $15 minimum wage will be phased in over 2 years for businesses with 10,000 or more employees, over 4 years for businesses with 100 to 9,999 employees, 5 years for businesses 6 to 99 employees, and 7 years for businesses with 5 or fewer workers.

After reaching $15 per hour, the City will require an annual increase to the minimum wage based on the statewide adjustment, which is announced by Minnesota DOLI in September and then goes into effect on January 1 of the following year.

Here is how the complicated phase-in will work:

Determining Business Size

The St. Paul ordinance calculates an employer’s business size based on the “average number [of] employees per week during the previous calendar year.”  This calculation includes all employees who work for the employee (full-time, part-time, joint, or temporary employees), regardless of whether they perform work in the city.  A franchisee is required to count all employees working at all franchises owned and operated by the same franchisee.

Thus, for example, an employer will be covered by the ordinance even if it has 1 employee working in St. Paul and 150 employees working in Golden Valley.  The employer would be considered a “Large Business” (100 to 999 employees) and would need to increase the St. Paul employee’s wages to $11.50 by July 1, 2021.

There are special rules for new businesses and restaurants with 10 or fewer locations.

Ordinance Applies Regardless of Employer’s Location

The St. Paul ordinance applies to any work that is performed within the geographic boundaries of the City.  Non-St.-Paul-based employees are entitled to the $15 wage only if they perform at least 2 hours of work for the employer in any particular week.

For example, an employer who sends a technician to repair a machine in a factory located in St. Paul would need to pay its employee at least the St. Paul minimum wage if that employee worked 2 or more hours within the city of St. Paul.

Other Provisions

The St. Paul ordinance does not include an exception for tipped workers in the hospitality industry. Therefore, all workers in St. Paul will be subject to the $15 minimum wage.

St. Paul’s Department of Civil Rights will oversee enforcement of this new requirement.  While the ordinance does not expressly contain a private cause of action for failure to pay minimum wages, it does provide a cause of action for “retaliation” based on rights set forth in the ordinance.  One of those rights is “the right to earn minimum wage,” so it’s possible that an attorney could bring a private lawsuit in state district court based on an employee’s failure to earn the minimum wage.  Attorneys’ fees are available for successful claimants.

Bottom Line

Minimum wage is coming to St. Paul.  While the legal challenge to the Minneapolis minimum wage ordinance is still winding its way through the courts, it is unlikely that the court or Governor-elect Walz will undue municipal attempts to regulate employment law.  Thus, St. Paul employers and employers with employees working in St. Paul should begin gearing up for a very different employment environment within the city limits.

The post St. Paul Enacts $15.00 Minimum Wage appeared first on Felhaber Larson.

As we previously posted in Judge says $15.00 Minimum Wage in Minneapolis Applies to All Employers Starting Jan. 1, the Minneapolis’ minimum wage ordinance survived legal challenges and is now in effect.  The ordinance requires large businesses in the City with more than 100 employees to pay workers $10 an hour. On July 1, 2018, the minimum wage increased to $10.25 for “small employers” (those with 100 or fewer employees) and $11.25 for larger employers.

This is a reminder to employers to ensure that all employees working within the geographic boundaries of the City of Minneapolis for at least 2 hours during the week must be paid the applicable minimum wage. Employers can check this map to determine if they are within the applicable City boundaries.

Violations of the ordinance can be enforced by both the city and private persons, and damages available include double the amount of wages that were underpaid.  If the City brings an action, the employer can be liable for additional administrative penalties and fines.  If a lawsuit is brought by a private individual, costs and attorneys are available as well.

Bottom Line

To avoid these claims, be proactive and confirm that all employees working in Minneapolis are being paid the legally mandated minimum wage.

The post No Happy Meals For Local McDonald’s After $20,000 Minimum Wage Settlement appeared first on Felhaber Larson.

Basis for the Decision

The Minneapolis ordinance requires that sick leave be provided to any employee working in the city for 80 hours or more per year.  The court found that the burden imposed on non-resident employers by the ordinance outweighed the benefit to the health and safety of  Minneapolis residents:

“Any potential benefit to the health and safety of Minneapolis residents from an employee who works the requisite 80 hours pales when weighed against the imposition of record keeping and administrative obligations incurred by companies located outside the City.”

What Might Happen Next

The court left open the possibility that a more narrowly-tailored ordinance could be enforced against non-resident employers:

It is one thing to impose tracking and record keeping requirements on companies located outside of Minneapolis whose employees work for significant periods in Minneapolis, and will materially benefit from the Minneapolis Ordinance. It is quite another matter to impose, extraterritorially, requirements regarding employees who rarely work in Minneapolis, and who won’t materially benefit from its provisions.

As a result, the judge concluded that “the Minneapolis Ordinance exceeds the City’s territorial authority” and he enjoined the City from enforcing the Ordinance against any employer resident outside the geographic boundaries of the City of Minneapolis.

Bottom Line

While both parties will likely appeal Judge Dickstein’s decision, the City of Minneapolis will continue to be precluded from applying its ordinance against employers that are “resident outside the geographic boundaries of the City . . .”.  Most have construed this to mean that the employer must actually own or rent property located within the City.

This standard is similar to the standard that has been imposed in St. Paul, which requires employers to have a “physically permanent location in Saint Paul” in order for the ordinance to apply.

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This ruling was not surprising.  As we reported this past December in our post entitled Judge says $15.00 Minimum Wage in Minneapolis Applies to All Employers Starting Jan. 1, Judge Burke previously denied various parties’ request for a temporary restraining order to prevent the City from enforcing its ordinance.  This latest action was simply the next step in the process and there was little reason to expect that Judge Burke would change her mind

What the Ruling Says

In her opinion, Judge Burke determined that the ordinance was a valid exercise of the City’s regulatory authority as a “home rule charter city.”  She further concluded that the ordinance did not conflict with Minnesota’s Fair Labor Standards Act, which has established a statewide minimum wage of $9.65 for “large employers” and $7.87 for “small employers.”

Judge Burke rejected Graco’s argument that the minimum wage ordinance had an impermissible “extraterritorial reach” – that is, it improperly applied to employers located outside the city.  Judge Burke noted that the ordinance “only applies to work actually performed within the city limits of Minneapolis.”  Specifically, the minimum wage ordinance applies only if an employee works in the city for 2 or more hours in a given week.

Thus, all employers (regardless of whether they are based in Minneapolis) are subject to the minimum wage ordinance if their employees work two or more hours in the city in a given week.  Employers must already have begun to phase in the new minimum wage rates according to the schedule we listed in the post cited above.

Compare This to the Sick Leave Ordinance

Judge Burke’s decision that the minimum wage ordinance applies to employers residing outside the city limits may actually impact similar litigation that is currently moving forward in regard to the Minneapolis sick leave ordinance.  Hennepin County District Judge Mel Dickstein is scheduled to rule in August on whether that ordinance applies to employers outside the city limits, and he may look to Judge Burke’s decision for guidance.

If Judge Dickstein rules that the sick leave ordinance does not apply to non-resident employers, the reasoning of that decision might spur Graco to continue to challenge Judge Burke’s ruling on minimum wage.

Bottom Line

Given this decision, all employers (regardless of location) are subject to the Minneapolis $15 minimum wage ordinance and are required to begin phasing in the new minimum as directed by the ordinance.  We will await further developments.

The post Judge Rules (Again) That Minneapolis Minimum Wage Law is Valid appeared first on Felhaber Larson.

According to the newspaper report, the employee filed a complaint with the City after he was retaliated against by his employer (a Minneapolis gas station) for trying to use sick leave.  Specifically, the employee alleged that in September 2017 his employer tried to force him to find a replacement when he attempted to leave early because he was sick.  In addition, the employee alleged that he was left off the schedule and thus effectively terminated, following his use of sick leave.

The $11,000 settlement payment was designed to compensate the employee for lost wages.  As we wrote in Minneapolis Prescribes Mandatory Sick Leave back when the ordinance was being finalized, the City can order an employer to pay back pay or to provide employees with sick leave if it was not provided.  In addition, employers can face administrative penalties of $1,500 for violating the confidentiality, discrimination, or retaliation protections set forth in the ordinance.  Failure to keep adequate records can also result in a $50 per day fine after the City provides the employer with notice of the violation.

Bottom Line

While this is the first, this certainly will not be the last employer who is hauled before the Minneapolis Department of Civil Rights to account for allegations of violating the sick leave ordinance.  Minneapolis employers can and should review their sick leave policies with managers and other front-line supervisors to ensure that employees do not experience discrimination or other retaliation for requesting or using sick leave.

Finally, if you have not yet adopted a policy designed to comply with this new ordinance, do not wait one more day to do so!

The post First Minneapolis Sick Leave Case Settles – That Was Quick appeared first on Felhaber Larson.

In addition, unlike Minneapolis’ Sick Leave Ordinance, employers who are not physically located in the City must take notice because they will have to make sure that most of their employees working in Minneapolis receive the benefit of the new ordinance.

Minneapolis’ $15 Minimum Wage Ordinance

As we reported in Minneapolis Passes Phased-In $15.00 Minimum Wage, the City of Minneapolis is prepared to implement a $15 minimum wage requirement on January 1, 2018, according to the following schedule:

Ordinance Applies if Employee Works in MPLS for 2 Hours in a Week

The Minimum Wage Ordinance applies to all time worked by an employee, of at least two hours per week, within the geographic boundaries of Minneapolis. Thus, for example, if an employee works 5 hours in the City, then the employer must pay the required minimum wage for all of those hours. If the same employee works only 1 hour in the City during the next week, then the employer is not required to pay the City-mandated minimum wage for that time.

Similar to its challenge of Minneapolis’ Sick Leave Ordinance, the Minnesota Chamber of Commerce brought a lawsuit challenging the City’s authority to issue the Ordinance and the City’s ability to enforce its ordinance on employers who do not have a physical presence in the city.  Last week, Hennepin County Judge Susan N. Burke rejected both challenges.

Judge Burke’s Rationale

First, Judge Burke ruled that the Minimum Wage Ordinance does not conflict with existing state law because the Minnesota Fair Labor Standards Act (“MFLSA”) merely “sets a floor, but not a ceiling for minimum wages in the State. . . .” She further explained that to the extent that different record keeping requirements might apply between the MFLSA and the minimum wage ordinance, those requirements are not irreconcilable and that “[e]mployers are capable of complying with both laws.”

Second, Judge Burke concluded that City was not precluded from enforcing its ordinance against employers who did not have a physical location in the city because the Ordinance applied only to hours worked within the City. She wrote:

The Ordinance focuses on preventing harms occurring within the City of Minneapolis. The purpose of the Ordinance is to address sub-standard living conditions and poverty existing within the Minneapolis city limits; to address racial and income disparities existing among Minneapolis workers, and to ensure a livable wage for people working in the City of Minneapolis. The Ordinance only applies to work actually performed within the city limits of Minneapolis. It is unlikely Plaintiffs will be able to show that the Ordinance has an impermissible extraterritorial reach.

Bottom Line

Given this decision, all employers (regardless of location) will be subject to Minneapolis $15 Minimum Wage Ordinance. This means that “large employers” (i.e., those with 100+ employees) will need to begin paying employees $10 per hour for all hours worked within the City (excluding commute time), provided that the employee works at least 2 hours in the City during that workweek.  Other employers will need to begin increasing their wages beginning on July 1, 2018, unless or until the decision is reversed by the Court of Appeals.

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In affirming the district court’s decision, the appeals court reasoned that a potential for a “checkerboard of conflicting regulations” was insufficient to invoke preemption and that the dearth of existing state laws regulating employer-provided sick leave showed that “the legislature has not indicated an intent to occupy the field.”

At the same time, the appeals court left in place the lower court’s injunction preventing the City of Minneapolis from enforcing its ordinance against non-resident employers.  That is, the City of Minneapolis will continue to be prevented from enforcing its ordinance against employers who do not have a physical presence in the geographical boundaries of the city.

St. Paul, which was not part of the case, has continued to apply its ordinance consistent with the injunction in the Minneapolis case.

 Bottom Line

While an appeal to the Minnesota Supreme Court is likely, the Minneapolis sick leave ordinance (and, by extension, the St. Paul ordinance) will continue to apply to employers who have physical operations in either city.  Employers outside either city can rest easy – at least for now.

We will continue to monitor this story as it develops.

The post Appeals Court Upholds Minneapolis Sick Leave Ordinance appeared first on Felhaber Larson.

Determining Coverage

To be covered by either ordinance, the employer must have a physical operation in either Minneapolis or St. Paul.  Both Minneapolis and  St. Paul have posted maps that allow employers to determine whether their address is within the city and therefore covered by the ordinance.  If covered, only those employees who work at least 80 hours within the city are entitled to the mandated sick/safe time described by the ordinances.

Updating Leave Policies

As we have previously reported, both Minneapolis and St. Paul mandate that employees receive at least 1 hour of sick/safe time for every 30 hours worked, up to 48 hours per year. Employees can accrue up to 80 hours of sick/safe time in their “bank,” which they must be permitted to carry over from year to year.

While employers who provide sufficient leave via an existing policy (e.g., PTO or sick leave policy) can use that policy to comply with the ordinances, employers must ensure that their existing policies are in compliance with the notice and procedural rules set forth in the ordinances.

Updating Handbooks and Posters

Both the Minneapolis and St. Paul ordinances require that covered employers provide notice to employees of their rights under the respective ordinance in any employee handbook.  A sample notice for employers in either city can be obtained here. 

Additionally, workplace posters have been published by both cities, and the relevant poster must be included with the employer’s other workplace postings.  The Minneapolis poster is available here while the St. Paul poster can be obtained here.

Bottom Line

For employers covered by the new ordinances, time is just about up.  You need to update your leave policies, handbooks, and posters now.

Thus,

The post Mpls. and St. Paul Sick Leave Rules Must Be In Your Handbook – Are They In Yours? appeared first on Felhaber Larson.

As we previously reported, the Minnesota Legislature proposed a legislation that would have prohibited any attempt by local governments to adopt and enforce laws and policies related to private-sector employment relationships, including mandating a higher minimum wage and sick leave.

The original bill (HF 600) failed to pass both houses before the end of the session on May 22. After a special session was called, a new bill (SF 3) was passed that included the preemption language from original bill.  The new bill also included several provisions designed entice Governor Dayton to sign the bill.

The Veto is Official

However, the Governor followed through on his promise to veto the bill. His press release stated:

The role of state government is to set minimum standards for workplace protections, wages, and benefits, not maximums. Should local officials, who were elected by their constituents in their communities, approve higher wage and benefit levels to meet the needs of their residents, they ought to retain the right to do so.

Unless the legislature overrides the veto (an almost impossible scenario in light of the narrow voting margins approving the legislation), the sick leave ordinances in Minneapolis and St. Paul will go into effect on July 1, 2017.  This is because the appeal that was filed by the Minnesota Chamber of Commerce will not be heard by the Minnesota Court of Appeals until July 11^th, and a decision likely will not be issued for 90 days thereafter.

Bottom Line

Employers with operations in Minneapolis or St. Paul should start preparing for the new sick leave ordinances now. This may include updating current policies, promulgating new policies for previously-ineligible employees, updating handbooks, and obtaining the necessary posters.

We will continue to provide employers with guidance on preparing for the sick leave ordinances.

The post Governor’s Veto Means Sick Leave Ordinances Are Official On July 1 appeared first on Felhaber Larson.

In St. Paul, employers with 23 or fewer employees get a reprieve until January 1, 2018.

Despite the threat of legal challenges, both cities have taken significant steps to get ready for implementation.

What’s Happened Lately?

As they promised to do, the cities have released supplemental materials, including:

• Administrative rules for both Minneapolis and St. Paul
• A “frequently asked questions” document for both Minneapolis and St. Paul
• A checklist for the Minneapolis ordinance

At the same time, challenges to the city ordinances continue to move forward. First, the lawsuit filed by the Chamber of Commerce is pending at the Minnesota Court of Appeals.  While the Chamber’s request for expedited review was denied, it is possible that the matter could be heard before July 1.  A decision before that date, however, is unlikely.

Potential Legislative Impact

The second challenge remains tied up at the Minnesota Legislature. While both houses have passed H.F. 600, which would nullify any city ordinances requiring employers to provide paid/unpaid leave or establishing a minimum wage higher than the state minimum wage (currently $9.50 for large employers and $7.75 for small employers), each body passed a different version of the bill.  Thus, the bill will have first go to conference committee to hammer out the differences and then be repassed by both chambers before being presented to Gov. Mark Dayton, who has been quoted as saying that he has “very significant concerns” about the bill, but did not say that he would necessarily veto it.

Bottom Line

Regardless of the legal and legislative maneuvering, Minneapolis and St. Paul employers should begin preparing for the July 1 effective date. Felhaber Larson will be conducting a half-day seminar on the new rules on June 1.  Details on that program will be available in the next few days.

The post Despite Legal Challenges, Sick Leave Ordinances Are On Track For July 1 appeared first on Felhaber Larson.

Many employers have objected to city attempts to regulate employment law in this fashion, in part because they are concerned about being buffeted by multiple and perhaps conflicting requirements in the different cities where they operate.  Although a recent decision from Ramsey County Judge Mel I. Dickstein suggested that the ordinances may be lawful, lawmakers at the Capitol have introduced a bill that would take this sort of regulation out of the hands of Minneapolis, St. Paul and the other 852 municipalities around the state.

Preemption Legislation

H.F. 600 prohibits local governments from adopting and enforcing local laws and policies relating to the employment relationship in the private sector. Specifically, the bill would prohibit local governments from adopting or enforcing four types of regulations:

• a minimum wage higher than the state minimum wage;
• a requirement that a private employer provide paid or unpaid leave;
• a regulation relating private employee work hours or scheduling; and
• a requirement that a private employer provide particular benefits, terms of employment, or working conditions

The bill does not prohibit local governments from setting wages, benefits, terms, and employment policies with respect to local government employees.

The prohibition applies to local government policies enacted on or after January 1, 2016.

Status of the Bill

Yesterday, the House bill overcame its first hurdle when it was passed (13-9) by the House Committee on Job Growth. It has now been referred to the House Committee on Government Operation.  A companion bill, S.F. No. 580, has also been introduced in the Senate and referred to the Senate Committee on Jobs and Economic Growth.

Of course, to become law any preemption bill would need pass both the House and Senate and be signed by Governor Dayton or, failing that, garner sufficient support in both chambers to override the governor’s veto.

Bottom Line

If this bill becomes law, employers will be relieved of a potentially great burden.  For example, consider how difficult it might be for a retailer with multiple outlets to juggle and keep track of all of the different and perhaps contradictory rules in various cities.  A one-size-fits-all approach will be greatly appreciated.

We will continue to monitor this issue as it develops.  In the meantime, you can watch the hearing on the bill by the House Committee on Job Growth here.

The post New Bill Seeks to Prevent City Regulation of Sick Leave and Minimum Wage appeared first on Felhaber Larson.

Some of these amendments are helpful in figuring out how all of this will work.  Others, however, call out for clarifications of the clarification.

• Sick Leave is Paid at the “Regular Rate of Pay.”  The amendments specify that employees taking sick leave must be paid his or her “regular rate of pay” for the hours that the individual “was scheduled to work.”  For exempt employees, “regular rate of pay” is defined as the “equivalent rate.”  For non-exempt employees, the term includes “shift differentials,” but does not include: “tips,” “commissions,” “expense reimbursements,” “bonuses,” or payments pursuant to a profit-sharing plan.  “Premium payments” for overtime work or work on the weekends, holidays, etc., also can be excluded if the premium rate is at least 1.5 times the employee’s normal rate.

• Accrual.  The amendments specify that sick leave accrues only in on-hour increments; no longer in fractions of an hour.  The amendments also provide that the employer’s recording of the accrual can be done consistent with its practices or industry standard, provided that it is not less than monthly.

• Front-Loading.  In lieu of tracking the employee’s accrual of sick leave, the amendments permit employers to “front load” leave by providing: (1) 48 hours of leave immediately following the employee’s 90 days of employment, and (2) at least 80 hours of leave at beginning each leave year (following the initial year).

• Recordkeeping.  The amendments provide more prescriptive language for records that must be kept by the employer to include hours worked (by non-exempt employees only), leave available, and leave used.  The amendments remove the portion of the ordinance that required employers to “track hours worked in the city” for employees who “occasionally perform work in the city.”

• More Generous Leave.  The amendments specify that employers who have more general leave policies are not required to provide additional leave.  However, the amendments make clear that, to be exempt, the employer’s policy must “provide for greater accrual or use by employees” and must be made available “for the same purposes and under the same conditions as sick and safe time” as set forth in the ordinance.  If all of those conditions are not met, the employer will be required to provide additional sick leave under the ordinance.

Bottom Line

While these amendments do offer some clarity, many unanswered questions remain.  City Officials have reported that they are working on an FAQ document, with a release scheduled for October.  We will continue to update you as this story develops.

Critical developments like this will be in focus at the Felhaber Larson Labor & Employment Seminar on October 28, 2016.  You may register for this program by clicking here.

The post Mpls. Clarifies Sick Leave Law; More Clarity to Come appeared first on Felhaber Larson.

Coverage

The St. Paul ordinance applies to employers of all sizes – there is no “small employer” exclusion.  However, only those employers who have workers (including temporary and part-time workers) that perform work within the geographic boundaries of St. Paul for at least 80 hours per year are subject to the ordinance.  If none of your workers perform work in St. Paul for that many hours, you are off the hook.

How Leave is Earned

The basics of the new ordinance are:

–  Minimum Accrual. Covered employees must be provided with at least one hour of paid leave for every 30 hours worked. The ordinance does not specify that only those hours worked in St. Paul are credited for purposes of sick leave accrual, so it may be that all hours worked by the employee (even if they are outside the city of St. Paul) must be credited toward the employee’s accrual of sick leave.  Clarification on this will likely be issued soon.

–  Waiting Period. While accrual begins at the date of hire (or on the effective date of the ordinance), use of the paid leave may begin after 90 calendar days on the job.

–   Annual Cap. Employers can limit an employee’s annual sick leave accrual to 48 hours per year.

–   Maximum Carryover. Up to 80 hours can be carried over from year to year.

–   Minimum Usage.  Employees may be required to use sick leave in four-hour increments.

Employees using their paid sick leave must be paid “at the employee’s standard hourly rate” for hourly employees or “equivalent rate” for salaried employees.

How Leave May Be Used

Employees may use leave for many of the same purposes as the Minneapolis ordinance: (1) an illness, injury, health condition, or preventative care; (2) care for a family member for the same reasons; (3) domestic violence or personal safety issues; (4) certain business closures by order of a public official; or (5) care for a child whose school or place of care has been closed by order of a public official.

In addition, the St. Paul ordinance provides that employees may use sick leave to “care for a family member whose school or place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected closure.” Presumably, school “snow days” and/or a daycare provider’s unexpected closure would be covered by the ordinance.

Recordkeeping and Notice

Employers will have to comply with notice and recordkeeping requirements:

 – Employers must include a “notice of rights and remedies” under the Ordinance in their employee handbook;

 – Employers also must post a “notice” in each establishment where employees covered by the ordinance are employed;

–  Employers must track all “hours worked by employees,” which presumably includes both exempt and non-exempt employees;

–  These records must be retained for at least three years.  An employer who fails to keep adequate records may be “presumed” to have violated the ordinance; and

–  Employers must treat as confidential all information provided by the employee in support of the employee’s request for sick leave, including the fact that “the employee has requested or obtained leave.”

Exemption

The St. Paul ordinance provides that employers already providing these benefits are exempt from its requirements. However, this may not be a great comfort to most employers since it seems that all obligations of the St. Paul ordinance must be present for the exemption to exist. Therefore, even if an employer already grants more sick leave than the ordinance requires, the accrual and carryover provisions also would have to be observed.

Enforcement

The Ordinance will be administered and enforced by the St. Paul Department of Human Rights and Equal Economic Opportunity (SPDHR). If a violation is found to have occurred, the SPDHR has the ability to award reinstatement and backpay, as well as:

–  For the first violation, two times the dollar amount of sick leave withheld from the employee or $250, whichever is greater;

–  For the second violation, the SPDHR may also award an administrative fine of $1,000 (payable to the city); and

–  For the third and any subsequent violation, the SPDHR may award an administrative fine of up to $1,000 (payable to the worker) or in the amount of ten percent of the total amount of unpaid wages, whichever is greater.

The ordinance specifically warns that employers are barred from retaliating against employees for using or attempting to use sick leave.  It remains to be seen, however, how this will be interpreted in connection with attempts to discipline employees for excessive absences that might still be subject to sick leave.

In addition to filing a charge with SPDHR, an aggrieved employee may file a lawsuit against the employer in state district court.   The St. Paul ordinance provides that a successful plaintiff may recover two times the value of any uncredited sick leave, costs, as well as “reasonable attorneys’ fees.”

Bottom Line

St. Paul often seeks to keep up with or even surpass Minneapolis, and it looks like they nailed it here since this ordinance seems more expansive than the parallel law passed across the river.  The decision not to exempt small employers will undoubtedly be a burden on many small retailers and non-profits.  Coverage of student workers on St. Paul’s college campuses is a real head-scratcher since student employment is usually a tuition assistance measure and the students are not generally in danger of losing their pay or their jobs if they miss work due to illness.

While it is always possible that somebody will try to litigate to prevent this ordinance from taking effect, it is strongly advised that all employers covered by this ordinance start preparing to meet your obligations.  It may cause some headaches but at least now you can call in sick.

Critical developments such as this will be the focus of the Felhaber Labor & Employment Seminar on October 28, 2016.  You can view the seminar agenda and .access our online registration by clicking here.

The post St. Paul Passes Sick Leave Ordinance appeared first on Felhaber Larson.

The ordinance is relatively unchanged from the version that we summarized in “Minneapolis Prescribes Mandatory Sick Leave” although it now covers all employers of one or more employees (previously the threshold was six). However, employers with less than six employees need only provide unpaid sick and safe leave.  A few other technical changes appear as well.

Is Everybody Happy?

Workers anticipating new benefits and greater flexibility to meet family needs are obviously cheered by this development but members of the local business community remain dissatisfied by what they believe is an anti-competitive measure. A joint statement from the Minneapolis Downtown Council, and the Minneapolis Regional Chamber of Commerce read:

“On behalf of businesses throughout Minneapolis and the region, we remain concerned about the many impacts today’s City Council vote will have on employers and employees alike. It is especially unfortunate that the adopted ordinance will disrupt administration of existing time-off plans which provide superior benefits to workers. Despite their good intentions, our elected officials do not know better than the thousands of businesses which have developed policies and practices that work well for them and the people they employ. We take Mayor Hodges and Council Members at their word that this is an unintended consequence which will be remedied prior to these new mandates going into effect.”

Bottom Line

Much work remains as the City must still decide how they will determine if an employer’s existing benefit plan complies with the new ordinance and how the Minneapolis Civil Rights Department will enforce these new requirements.  However, absent successful legal challenge, it looks like paid sick leave is here to stay for people working in Minneapolis.

The post Mpls. Sick Leave Ordinance Passes Unanimously appeared first on Felhaber Larson.

The Ordinance promises to cast a significant and as yet imprecise shadow over employers with any degree of presence in Minneapolis. The components of this new Ordinance (and a few salient observations about them) are as follows:

Coverage

The Ordinance covers all employers with “6 or more employees.” The employer need not have any actual operations within the borders of Minneapolis (or even in Minnesota at all) – the only limitation is that the employer has 6 or more employee and at least one such employee “perform(s) work within the geographic boundaries of the City for at least 80 hours in a year…”

For example, a six-person house-cleaning business with customers in Minneapolis would be covered, as would a large out-of-state company with a telecommuting employee working out of their home in the City.  Of course, the benefit would only apply to the actual employees who work within the Minneapolis city limits.

Benefit

The basics of the Ordinance are:

–  Covered employees can earn one hour of paid sick leave for every 30 hours worked;

–  Up to 48 hours can be accrued each year;

–  Use of the paid leave may begin after 90 days on the job (presumably calendar days);

–  Up to 80 hours can be carried over from year to year.

Employees using their paid sick leave must be paid “at the same hourly rate . . . as would have accrued during the time the accrued sick and safe time is used.” Fair enough, but what if the employee uses sick leave on a day in which they would have earned overtime, or when they would have received a premium for working a weekend or a holiday? Are they then entitled to more than merely their straight time rate?

How Leave May Be Used

Employees may use leave for: (1) an illness, injury, health condition, or preventative care; (2) care for a family member for the same reasons; (3) domestic violence or personal safety issues; (4) certain business closures by order of a public official; or (5) care for a child whose school or place of care has been closed by order of a public official.

Interestingly, the Ordinance allows employees to take sick leave in “the smallest amount of time tracked by the employer’s payroll system.” Thus, if your system tracks time in 15 minute increments or tenths of hours, employees must be permitted to use sick leave in these same tiny increments.

Recordkeeping and Notice

Employers will have to comply with notice and recordkeeping requirements:

–  Employers must include a “notice of rights and remedies” under the Ordinance in their employee handbook;

–  The Employer also must post a “notice of rights” poster in “any workplace or jobsite” where covered employees work. The notice must be in English and “all language spoken by more than 5% of the workforce.”

–  Employers will have to track the number of hours worked in the City of Minneapolis for each employee. Because the Ordinance does not distinguish between exempt and non-exempt employees for purposes of recordkeeping, employers may actually have to track hours for exempt and non-exempt employees alike.

–  These records will have to be maintained for a period of time after the employee stops working in Minneapolis since the benefit must be reinstated if the employee returns to work in the city.

Exemption

The Ordinance provides that employers already providing these benefits are exempt from its requirements. However, this may not be a great comfort to most employers since it seems that all obligations of the Ordinance must be present for the exemption to exist. Therefore, even if an employer already grants more sick leave than the Ordinance requires, the accrual and carryover provisions also would have to be observed.

Moreover, usage would have to be allowed for the other purposes of the law (e.g. domestic abuse, stalking, and school and business closures ordered by a public official), which most sick leave policies do not address.  Employers will have to flyspeck their existing policies to insure that they match the Ordinance in every way.

Enforcement 

The Ordinance will be administered and enforced by the Minneapolis Civil Rights Department (MCRD). “First violations” that occur between July 1, 2017 and July 1, 2018, will only be subject to mediation and warnings. After July 1, 2018, or earlier in the event of a second offense, employers in violation are subject to:

–  Orders for reinstatement and back pay;

–  The crediting of any sick leave that was not credited plus payment to the employee of the dollar value of the accrued sick and safe time accrued but not credited multiplied by two, or $250.00, whichever amount is greater;

–  Payment of any sick time unlawfully withheld plus payment to the employee of the dollar amount of accrued sick and safe leave withheld multiplied by two, or $250.00, whichever amount is greater;

–  Up to a $1,500 administrative penalty payable to the employee for each violation of the confidentiality or retaliation provision;

–   An administrative fine payable to the city of up to $50.00 for each day that the employer violates the notice, posting, or recordkeeping requirements set forth in the Ordinance.  Both the City and the employee are permitted to inspect the timekeeping records, and failing to keep the required records permits the City to presume that the employer is in violation.

Is the Ordinance Legally Valid?

Perhaps not.  Previous Minnesota Cases have ruled that local entities may not regulate in areas that should be addressed on a state-wide basis.  In one such case, the Minnesota Supreme Court struck down a local boat licensing requirement, calling it “unreasonable and absurd” to expect boat owners to register their boat with each and every municipality which has a lake or a portion of the lake within its boundaries.

By this same token, if other municipalities pass their own sick leave ordinances, employers throughout the state will face the daunting and arguably unreasonable task of monitoring  and revising their sick leave policies on a city-by-city basis.   A legal challenge to the Ordinance would therefore not be at all surprising.

Bottom Line

There is much we still do not know about this Ordinance so it is fortunate that it is not scheduled to go into effect until 2017, and perhaps not even then if a legal challenge ensues.

Still, time passes quickly and employers meeting the threshold of one employee working 80 hours a year in Minneapolis will have to revise their policies to comply.

The post Minneapolis Prescribes Mandatory Sick Leave appeared first on Felhaber Larson.

Paid Sick Leave for Federal Contractors

The Department of Labor must still undertake rulemaking to implement the Executive Order. However, here is a summary of the new sick leave requirement for federal contractors:

• Employees earn at least 1 hour of paid sick leave for every 30 hours worked.
• Employers may not “cap” the accrual of sick leave at or less than 56 hours.
• The paid leave can be used for the employee’s own illness or to obtain “diagnosis, care, or preventive care from a healthcare provider.”
• The paid leave also may be used to care for or to obtain a diagnosis or preventative care for a family member, which is defined to include anyone “related by blood or affinity whose close association with the employee is the equivalent of a family relationship.”
• The paid leave also may be used to recover from or seek assistance for incidents of domestic violence, sexual assault or stalking.
• The paid leave cannot be made contingent on the employee finding a replacement to cover the missed time
• The paid leave can carry over to successive years (subject to the 56-hour cap).
• The paid leave need not be paid out at termination, although employees who are rehired within 1 year are entitled to have their paid leave reinstated.

Questions remain about how the mandatory sick leave will interact with employer-provided PTO and other leave mandated by state or local law. It appears, however, that contractors who already provide sick leave benefits (and presumably PTO) will not be required to do anything more as long as their policies meet or exceed what the Executive Order requires.

Bottom Line

It is interesting to note that the Executive Order kicks in after President Obama’s term expires, so it remains to be seen whether his successor will be as committed to this new benefit for federal contractors’ employees.

Nevertheless, the move is expected to spur Congressional debate over the “Healthy Families Act,” which would require all businesses with 15 or more employees to offer up to 7 paid sick days each year.

We will continue to monitor this story as it develops.

The post President Orders Paid Sick Leave for 2017 appeared first on Felhaber Larson.

In May 2014, Governor Dayton signed the new fingerprinting and photographing legislation into law.  The new law revises the DHS’s Background Studies Act, Minn. Stat. 245C, and goes into effect on August 1, 2014.  The legislation was enacted after the DHS was awarded a $3 million federal grant to enhance its background check procedures.

The new fingerprinting requirements are part of broader changes to DHS background studies that the Department has said will speed up the hiring process, essentially eliminate “repeat” background studies, and make sure DHS is accessing the most accurate information.

There is no change in the law regarding when a background study is required or who is required to have one.

Under the amended law, current employees generally will not have to be fingerprinted. Fingerprints will only be required for individuals who otherwise need a background study.

For most programs, the changes will apply only to people who provide direct contact services when they are hired or, in some instances, change jobs within an agency. The DHS license holder or program also must conduct a new background study when an individual changes his or her legal name.

The amendments also extend from 90 to 120 days the amount of time someone can be absent from a position without needing a new background study.

The fingerprinting will be done at “livescan” locations throughout the state, and applicants will not need to go to law enforcement agencies to be fingerprinted. The electronic fingerprinting takes between five and ten minutes.

DHS expects the cost to be $10.00 to $15.00, and the law does not specify whether the employer or employee must pay the fee. Neither DHS nor the Minnesota Bureau of Criminal Apprehension will maintain the electronic fingerprint images.

NETStudy™ 2.0—the Web-based system that will be implementing the background studies under the amended law—will roll out in a pilot phase with small groups of providers who volunteer to participate from now through January.

DHS will also be holding stakeholder meetings at eight locations statewide to provide an overview of the changes and the timelines. A DHS timeline is available here. By August, training materials and a user manual on the new system will be available online, with training videos available in September.

DHS expects to have statewide fingerprinting locations operational and will phase in the fingerprinting and photograph processes from January 2015 through April 2015.

According to the DHS, this new system will:

• Allow people to choose to submit a background study request on themselves.
• Permit providers to immediately hire people with cleared background studies (under the new system).
• Allow providers to readily transfer people with cleared background studies across the programs that they operate and decrease related paperwork.
• Keep background studies valid by using state court information to notify DHS if a person subsequently commits a crime that is disqualifying.
• Streamline required provider screening and documentation requirements.
• Reduce the amount of time it takes for DHS to complete certain background studies.
• Eliminate, in most cases, repeating the background study determination processing on the same person.

The DHS has posted an FAQ page here.

The DHS will be required to notify the applicant and the prospective employer within three days of the background check results, or that the request needs more time to be completed.

Minnesota implemented its background study system in 1991 for employees who work with children and vulnerable adults. The department conducts more than 270,000 background studies annually.

Bottom Line

The DHS is overhauling its background study procedures, and DHS-licensed employers will soon be required to collect fingerprints from new applicants as part of their background checks. However, the agency will provide training and is implementing the new rules in phases. We will keep you updated as new information becomes available.

The post Fingerprints and Photos Will be Part of Background Checks at DHS-Licensed Facilities appeared first on Felhaber Larson.

Pregnancy Leave Expanded from 6 to 12 Weeks

Effective July 1st, WESA increases the amount of pregnancy leave available to employees under the Minnesota Parenting Leave Act (“MPLA”) from 6 to 12 weeks. It is important to remember that the MPLA applies only to employers with 21 or more employees.

Nothing in the new law appears to prevent employees from taking an additional 6 weeks of unpaid parenting leave if the employee has already taken 6 weeks of parenting leave under the pre-WESA provision. However, the law does make clear that the leave “must begin within 12 months of the birth or adoption . . . .”

The MPLA, as amended, also makes clear that leave taken pursuant to the FMLA, as well as paid parental, disability, personal, medical, sick leave, and accrued vacation provided by the employer may be used to reduce the employee’s 12-week leave entitlement under MPLA as amended by WESA. Again, however, it is unclear how this provision would affect leave taken prior to the July 1 effective date.

Given the uncertainty in this area, employers who are subject to the MPLA should seek the assistance of counsel to ensure that their leave policies are properly updated and properly coordinated with other leave entitlements.

Expanded Uses of Employer-Provided “Sick Leave”

WESA also amends MPLA to expand the situations where employees may use employer-provided sick leave. First, effective July 1st, employees may use sick leave provided by their employer for the purpose of “providing or receiving assistance because of sexual assault, domestic abuse, or stalking.” Second, also effective July 1st, employers must permit employees to use their sick leave for “absences due to an illness or injury to the employee’s . . . mother-in-law, father-in-law, [and] grandchild.”

Under the new law, employers may limit employees’ use of “safety leave” and leave for extended family members, such as a mother-in-law, father-in-law, or grandchild to “no less than 160 hours in any 12-month period.”

There are two important limitations to this new law. First, as noted above, the MPLA applies only to employers with 21 or more employees. Second, the law does not require that employers provide employees sick leave benefits, either paid or unpaid. But, if they do, employers must permit employees to use these benefits in accord with the new law.

Wage Disclosure Protections

Effective July 1st, WESA creates a new section in Chapter 181, Section 181.172, which prohibits employers from “(1) requir[ing] nondisclosure by an employee of his or her wages as a condition of employment; (2) requir[ing] an employee to sign a waiver . . . which purports to deny an employee the right to disclose the employee’s wages; or (3) tak[ing] any adverse employment action against an employee for disclosing the employee’s own wages or discussing another employee’s wages which have been disclosed voluntarily.”

The new law does make clear that it does not “create an obligation on any employer or employee to disclose wages” or in any way permit an employee to “disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege or protected by law.”

The new law requires all employers who provide employees with an employee handbook to “include in the handbook notice of employee rights and remedies” under this new law. While cutting and pasting a copy of the new law is likely sufficient to comply with this requirement, employers should consider drafting a wage disclosure policy. But, be sure to have an attorney review the policy before it is implemented. Interested employers can also obtain a copy of our model wage disclosure policy from any member of Felhaber Larson’s Labor & Employment Law Group.

Any violation of the new law may permit an employee to bring a civil action for reinstatement, back pay, restoration of lost service credit and the expungement of adverse employment records. Also, certain employers may be on the hook for attorneys’ fees.

All employers, including those who provide an employee handbook, should take immediate steps to comply with the new law. Employers also may want to consider defining (with examples) proprietary information, trade secret information and privileged information, so employees understand that this information may not be shared.

Amendments to Nursing Mothers Break Statute

Effective July 1st, WESA amends Minn. Stat. § 181.939 to enlarge the employer’s obligation to provide a separate space for nursing mothers to express milk.

Specifically, the new law sets forth that employers must provide nursing mothers with a room or other location, “other than a bathroom or a toilet stall, that is shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet, where the employee can express her milk in privacy.” WESA provides that violations of this provision may be enforced through a civil action pursuant to Minn. Stat. § 181.944, which makes attorneys’ fees available.

Employers should be sure that their policies and practices relating to providing nursing mothers with breaks to express milk are updated by July 1 in order to comply with the specific requirements set forth in WESA.

Bottom Line

The time for action is now. These WESA provisions go into effect on July 1st, so employers must review and revise their employee handbooks and train supervisors on how to comply.

For more information on WESA, consider attending Felhaber Larson’s half-day seminar on July 23, 2014 entitled, “Assessing the Implications of the Women’s Economic Security Act.” For more information on the seminar, click here.

The post Several WESA Provisions Will Go Into Effect on July 1st appeared first on Felhaber Larson.

Pregnancy-Related Accommodations

This provision of WESA, which is already in effect, requires that employers provide: “reasonable accommodations to an employee for health conditions related to pregnancy or childbirth if she so requests . . . unless the employer demonstrates that the accommodation would impose an undue hardship . . . .” These accommodations include may include a temporary transfer to a less strenuous or hazardous position and limits on heavy lifting. WESA does provide that an employer is not “required to create a new or additional position in order to accommodate an employee . . . .”

WESA specifies that certain accommodations are not an “undue hardship.” These accommodations are “(1) more frequent restroom, food, and water breaks; (2) seating; and (3) limits on lifting over 20 pounds.” In fact, employers are prohibited from requiring a doctor’s note with respect to these accommodations.

If you have not already done so, employers should update their workplace accommodation policies to reflect that certain accommodations, namely “(1) more frequent restroom, food, and water breaks; (2) seating; and (3) limits on lifting over 20 pounds,” will be provided to pregnant employees, upon request, without requiring a doctor’s note. Also, employers should seriously consider any pregnant employee’s request to be transferred to “less strenuous or hazardous position,” if such a position is available, or document reasons why such a request is an undue hardship.

“Familial Status” Added as a Protected Status to MHRA

This provision of WESA, which is also already in effect, amends the Minnesota Human Rights Act (“MHRA”) to add “familial status” to the list of protected statuses. “Familial status” is already defined in the MHRA as “the condition of one or more minors being domiciled with (1) their parent or parents or the minor’s legal guardian or (2) the designee of the parent or parents or guardian with the written permission of the parent or parents or guardian.”

Employers should ensure that their Equal Opportunity Statements (and other handbook provisions) include a provision specifying that the employer does not discrimination on the basis of “familial status” as defined by the MHRA.

Increasing Pregnancy Leave to 12 Weeks

This provision of WESA, which is effective July 1, 2014, increases the amount of pregnancy leave available from 6 to 12 weeks. It is unclear from the text of the bill whether an employer would be required to provide an additional 6 weeks of leave if the employer has already provided the employee with 6 weeks of leave. Nevertheless, there is nothing in the bill to suggest that employees are not entitled to a total of 12 weeks of leave simply because they already took leave before July 1.

Another provision of WESA makes clear that leave taken pursuant to the FMLA, as well as paid parental, disability, personal, medical, sick leave, and accrued vacation provided by the employer may be used to reduce the employee’s 12-week leave entitlement under WESA. Again, it is unclear how this provision would affect leave taken prior to the July 1 effective date.

Given the uncertainty in the area, employers should seek the assistance of counsel to ensure that their leave policies are properly updated and properly coordinated with other leave entitlements.

New “Safety Leave”

This provision of WESA, which is effective July 1, 2014, amends Minnesota’s sick leave law to provide that employees may use sick leave provided by their employer for the purpose of “providing or receiving assistance because of sexual assault, domestic abuse, or stalking.”

Employers that provide paid sick leave to their employees should be sure that their policies are updated by July 1 to permit employees to use sick leave for these new purposes.

Wage Disclosure Protections

This provision of WESA, which is effective July 1, 2014, makes it unlawful for an employer to prohibit its employees from disclosing their wages. This law also prohibits an employer from taking “any adverse employment action” against an employee for “disclosing the employee’s own wages or from discussing another employee’s wages which have been disclosed voluntarily.” This provision does not permit employees to disclose other proprietary, trade secret, or other privileged information. WESA provides that violations of this provision may be enforced through a civil action pursuant to Minn. Stat. § 181.944, which makes attorneys’ fees available.

Although much of the conduct prohibited by this provision of WESA is already prohibited by federal labor law, employers should be sure that their policies do not prevent employees from voluntarily discussing or disclosing their wages. Employers also may want to consider defining (with examples) proprietary information, trade secret information and privileged information, so employees understand that this information may not be shared.

Amendments to Nursing Mothers Break Statute

This provision of WESA, which is effective July 1, 2014, amends Minn. Stat. § 181.939 to enlarge the employer’s obligation to provide a separate space for nursing mothers to express milk. Specifically, the new law sets forth that employers must provide nursing mothers with a room or other location, “other than a bathroom or a toilet stall, that is shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet, where the employee can express her milk in privacy.” WESA provides that violations of this provision may be enforced through a civil action pursuant to Minn. Stat. § 181.944, which makes attorneys’ fees available.

Employers should be sure that their policies and practices relating to providing nursing mothers with breaks to express milk are updated by July 1 in order to comply with the specific requirements set forth in WESA.

Equal Pay Certificates for Certain State Contractors

This provision of WESA, which is effective August 1, 2014, provides that, with certain exceptions, businesses with more than 40 employees seeking contracts of at least $500,000 with the state must first obtain an “equal pay certificate of compliance” in order to do business with the state. This provision also provides that the state may audit the business’s pay practices at any time to ensure that they are in compliance with equal pay laws.

Employers with state contracts should begin assessing whether they are covered by this provision and how they will obtain the certificate.

Bottom Line

As you can see, employers have to begin taking action now to update their policies and procedures to comply with the provisions of WESA. Employers should not hesitate to contact any of the attorneys in Felhaber Larson’s Labor & Employment Group with compliance-related questions.

We will continue to monitor this issue as is develops.

The post WESA Requires Employers to Update their Handbooks this Summer appeared first on Felhaber Larson.

In addition to the creation of various grant programs, WESA contains numerous changes to Minnesota’s employment laws. Provided below is a brief summary of the most significant changes. Some of these changes were “effective upon enactment,” which means that they went into effect on May 11, 2014, while others will not go into effect until July 1, 2014 and August 1, 2014.

Provisions Already in Effect

• New Pregnancy Accommodations – WESA provides that “[a]n employer must provide reasonable accommodations to an employee for health conditions related to pregnancy or childbirth if she so requests . . . unless the employer demonstrates that the accommodation would impose an undue hardship . . . .” WESA defines certain accommodations as not imposing an “undue hardship,” including “(1) more frequent restroom, food, and water breaks; (2) seating; and (3) limits on lifting over 20 pounds.” Other accommodations, such as temporary transfer to a less strenuous or hazardous position, must be granted unless they impose an “undue hardship.” However, WESA does provide that an employer is not “required to create a new or additional position in order to accommodate an employee . . . .”

• “Familial Status” Added as a Protected Status to MHRA – WESA amends the Minnesota Human Rights Act (“MHRA”) to add “familial status” to the list of protected statuses. “Familial status” is already defined in the MHRA as “the condition of one or more minors being domiciled with (1) their parent or parents or the minor’s legal guardian or (2) the designee of the parent or parents or guardian with the written permission of the parent or parents or guardian.”

Provisions Effective July 1, 2014

• Increasing Pregnancy Leave – WESA increases the amount of pregnancy leave available from 6 to 12 weeks. The amendments also include a provision stating that an employer “may require an employee who plans to take a leave under this section to give the employer reasonable notice of the date the leave shall commence and the estimate of the duration of the leave.”

• “Safety Leave” – WESA amends Minnesota’s sick leave law to provide that employees may use sick leave provided by their employer for the purpose of “providing or receiving assistance because of sexual assault, domestic abuse, or stalking.”

• Wage Disclosure Protections – WESA also makes it unlawful for an employer to prohibit its employees from disclosing their wages. This law also prohibits an employer from taking “any adverse employment action” against an employee for “disclosing the employee’s own wages or from discussing another employee’s wages which have been disclosed voluntarily.” This provision does not permit employees to disclose other proprietary, trade secret, or other privileged information. WESA provides that violations of this provision may be enforced through a civil action pursuant to Minn. Stat. § 181.944, which makes attorneys’ fees available.

• Amendments to Nursing Mothers Break Statute – WESA amends Minn. Stat. § 181.939 to enlarge the employer’s obligation to provide a separate space for nursing mothers to express milk. Specifically, the new law sets forth that employers must provide nursing mothers with a room or other location, “other than a bathroom or a toilet stall, that is shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet, where the employee can express her milk in privacy.” WESA provides that violations of this provision may be enforced through a civil action pursuant to Minn. Stat. § 181.944, which makes attorneys’ fees available.

Provisions Effective August 1, 2014

• Certain State Contractors Must Obtain an “Equal Pay Certificate of Compliance” – WESA provides that, with certain exceptions, businesses with more than 40 employees seeking contracts of at least $500,000 with the state must first obtain an “equal pay certificate of compliance” in order to do business with the state. This provision also provides that the state may audit the business’s pay practices at any time to ensure that they are in compliance with equal pay laws.

Bottom Line

As you can see, there are a number of changes contained in WESA that will require action by Minnesota employers – and some actions must take place immediately. In the next few weeks, attorneys at Felhaber Larson will analyze each of these major changes, and provide employers with guidance on how to move forward.

Stay tuned for further developments.

The post The Women’s Economic Security Act is Now the Law in Minnesota appeared first on Felhaber Larson.

When the 2014 legislative session kicked-off in February, an increase to the minimum wage appeared certain — the only questions were (a) how much the increase would be and (b) whether it would be indexed for inflation.  After the House and the Senate passed different minimum wage bills, a conference committee was empaneled to hammer out the differences between the House and Senate versions.

After lengthy negotiations, legislators agreed on a minimum wage bill (H.F. 2091 / S.F. 1775) that includes the following:

• Beginning August 1, 2016, there will be a $9.50 minimum wage for businesses with gross sales over $500,000 in 2016. This wage will be phased in as follows: the wage will increase to $8.00 beginning August 1, 2014 and then to $9.00 on August 1, 2015.

• Beginning August 1, 2016, there will be a $7.75 minimum wage for businesses under $500,000 in gross sales in 2016. This wage will be phased in as follows: the wage will increase to $6.50 beginning August 1, 2014 and then to $7.25 on August 1, 2015.

• The $7.75 minimum wage rate would also apply to large businesses in the following circumstances: 90 day training wage for 18 and 19 year olds, all 16 and 17 year olds and employees working under a J1 visa.

• Beginning in 2018, all wages would increase each year on January 1st by inflation measured by the implicit price deflator capped at 2.5%. The indexed increase could be suspended for one year by the DOLI if leading economic indicators indicate the possibility of a substantial downturn in the economy. The suspension could only be implemented after a public hearing and public comment period.

On April 9, 2014, the legislation passed in the Senate (35-31) and then passed in the House (71-60) on the next day.

Bottom Line

Minnesota’s new minimum wage bill will go into effect on August 1, 2014.  On that date, Minnesota employers with gross sales over $500,000 must pay their employees at least $8.00 per hour.

Stay tuned for more information regarding Minnesota’s minimum wage hike.

The post Minnesota’s Minimum Wage Will Increase to $9.50 by 2016 appeared first on Felhaber Larson.

With estimates that 25% of all Americans have criminal arrest or conviction records, the MDHR is confident that the new law “offers the vast majority of these individuals a second chance at an opportunity for employment.” Undoubtedly, this also promises a big impact on hiring practices for Minnesota employers.

By now, employers should know that Minn. Stat. § 364.021 prohibits employers from asking job applicants to provide criminal history information on the initial job application.  But the MDHR’s Guidance clarifies that it is still permissible to ask for criminal background information if the request comes at the right time. For most public and private employers, the “right time” is after an applicant has been selected for an interview or offered conditional employment.

Below, briefly, are key takeaways from the MDHR’s Technical Guidance:

• Takeaway #1: Multistate Applications

Employers using a multi-state application must use a bold disclaimer advising Minnesota applicants not to answer any questions relating to criminal history.

• Takeaway #2: Timing of Inquiry

The law itself and the Guidance provide different rules on the timing of background checks. The law says that employers must wait only until an applicant is selected for an interview before asking about criminal background history. However, the MDHR’s Guidance recommends that employers actually wait until after conducting the interview to ask for that information. If the employer does not conduct interviews, the statute and the Guidance agree that the employer must wait until after making a conditional job offer to ask about criminal background history.

• Takeaway #3: Background Checks Required by Law

The Guidance also addresses the timing of criminal background checks when the employer is required by another statute to conduct criminal background checks. Again, timing matters since the Guidance, tells employers to look to the language of the statute creating the obligation to ask for criminal history information. In many cases, that statute will not require an employer to inquire into criminal history background until after the initial application.

The MDHR’s position on the Ban the Box statute is pretty shaky. As we previously reported, even the Minnesota Department of Human Services (DHS) previously concluded that the statute exempted health care employers and other similar fields. While the DHS subsequently changed its position after the MDHR issued its opinion, it remains to be seen whether the MDHR’s broad interpretation of the ban-the-box law can survive any potential legal challenges. In the meantime, Minnesota employers with legal obligations to do background checks must choose between applying the statutory language of Ban the Box or the MDHR’s more restrictive interpretation of Ban the Box.

Bottom Line

The MDHR’s Technical Guidance relates to the timing of criminal background inquiries, but it does not provide additional clarity on how to use an applicant’s criminal history in deciding whether or not to hire the candidate. Employers must be aware that an overly broad exclusionary policy based on criminal history could be considered discriminatory.  For additional information, check out the EEOC Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions (April 25, 2012).

Employers with questions about Minnesota’s ban-the-box law or the MDHS’s Guidance should feel free to contact the any of the Labor & Employment attorneys at Felhaber Larson.

Meggen E. Lindsay also contributed to this post.

The post It’s About TIME(ing). The MDHR Provides Guidance on the Ban-the-Box Statute appeared first on Felhaber Larson.

This is obviously a very important development for employers subject to Chapter 245C background check requirements. However, the reasoning underlying the DHS position shift most likely applies to every other Minnesota employer with a legal duty to conduct criminal background checks as well.

Minnesota’s Ban-the-Box Legislation

As we previously reported, effective January 1, 2014, Minnesota employers must not “inquire into or consider or require disclosure of an applicant’s criminal record or criminal history” until after the applicant has been selected for an interview. If there is no interview planned, the ban applies until a conditional offer of employment is made to the applicant.

The language of the new “Ban the Box” law contains what seems to be a clear exemption for “employers who have a statutory duty to conduct a criminal history background check.” This was presumed by most authorities to include health care and long-term care providers since they are obligated to conduct background checks of all direct care employees under Minn. Stat. Chapter 245C. In fact, in July 2013, the DHS specifically advised employers that “the new Ban the Box law does not affect employers that participate in the . . . background study process under chapter 245C.”

The Minnesota Department of Human Rights (“MDHR”) apparently disagreed with DHS and met privately with them to hash out what the statute required of employers that are obligated by law to conduct background checks.

MDHR and DHS Agree that Ban-the-Box Applies to Health Care and Related Employers

Thereafter, DHS did a complete about-face and issued a letter dated December 5, 2013, adopting MDHR’s position that the new law prohibits all employers from asking at the time of application about the applicant’s criminal history. Specifically, the DHS stated that, effective January 1, 2014:

[A]ll the same employers will still be required to initiate background studies under Minnesota Statutes, chapter 245C, however, employers will not be allowed to have a “box” on the application that asks if an applicant has a criminal history or has committed a specific crime or specific level of crime. Similarly, under the new law, employers will not be able to use a background study conducted by DHS (or other criminal history reviews conducted by another entity) as the first stage of screening applicants for a position.

The letter then described a hypothetical health care employer who receives 20 applications for a position. The DHS stated that, after January 1, 2014, it would be illegal for that employer to have a box on the application asking about criminal history or to initiate background studies on all 20 of those applicants. Instead, that employer would have to use non-criminal history factors to reduce the initial pool of applicants and could then request a DHS background for the candidates who made the first cut. According to DHS, this “secondary” screening is lawful under the new law because “[t]he practice of using background studies or other criminal history screens/reviews as a secondary or tertiary filter is consistent within the law.” Importantly, the DHS also reiterated that under the new law “employers may include a statement on applications informing applicants of the possible future implications that certain crimes could have on eligibility for employment . . . .”

Impact on Other Employers

While the DHS letter applies only to those employers required to conduct background searches under Chapter 245C, its rationale would seem to apply to all Minnesota employers with legal obligations to conduct background checks for certain jobs (e.g. teachers, apartment managers, etc.). Indeed, the DHS came to its conclusion only after conferring with the MDHR, which is the agency charged with the responsibility of enforcing the law. The MDHR asserts that all Minnesota employers are subject to the law. In the FAQ section of their web site, the MDHR explains:

If you are obligated to screen employees’ criminal records due to working with vulnerable populations or some other legal requirement you are still allowed to obtain necessary criminal background information. The change in statute does not preclude an employer from asking about an applicant’s criminal history, it merely changes the timing of when that request can be made, including for occupations with legal requirements about criminal records.

Bottom Line

The position adopted by the DHS and the MDHR is, at the very least, perplexing since it seems to ignore the clear exemption language of the Ban the Box statute. This leaves Minnesota employers that have legal obligations to do background checks in the position of having to choose between the following two options:

1. Ignore the DHS letter and the MDHR position in favor of complying with the plain language of the statute. Administrative regulations and pronouncements are not laws but rather, statements of how a particular law is interpreted by the administrative agency responsible for enforcing that law. It is still up to the court system to determine the actual meaning and application of any laws, including the Ban the Box statute. Of course, litigation can be time consuming and expensive, and many employers do not wish to be the “test case.” Still, if an employer considers it important enough to ask for the criminal background information on the application, they could risk incurring administrative sanctions (depending on the size of the employer, up to $5
   00 per violation, not to exceed $2,000 in a calendar month) and then contest those sanctions before a judge in the hope that the judge favors the statutory language over the MDHR interpretation; or

• Comply with the MDHR directive for now and await further clarification from the courts as to whether the statute really means what it seems to say. This is certainly the more prudent approach given the fact that the Ban the Box law does not prohibit employers from seeking criminal background information; it merely prevents this information from being obtained in the first step of the application process. This should not be a significant hardship and actually may benefit those employers that have some employees subject to a background check requirement and others who are not. Now, those employers need not maintain separate employment applications – they can use a unified document applicable to all jobs, which will be more administratively convenient and will avoid the possibility of administrative sanctions for inadvertently using the wrong form.

We hear that there are industry groups already discussing the possibility of legal challenges, so we may not have long to wait to see if the administrative interpretations hold up. We will continue to monitor this issue closely.

If you have any questions, feel free to contact any of the attorneys in Felhaber Larson’s Labor & Employment Group.

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Specifically, S.F. 840 amends the Minnesota Parenting Leave Act, Minn. Stat. §§ 181.941-181.944, to permit employees to use their employer-provided sick time for “an illness of or injury to the employee’s child . . . adult child, spouse, sibling, parent, grandparent, or stepparent.”  Previously, the law required only that employees be permitted to use their sick-leave benefits for the employee and the employee’s children.

Under the new law, an employer may limit the use of an employee’s personal sick leave benefits for relatives to no less than 160 hours in any 12-month period.  This limit does not apply to absences due to the sickness or injury of a child.

There are two important limitations to the new law.  First, the Minnesota Parenting Leave Act applies only to employers with 21 or more employees.  Second, the law does not require that employers provide employees sick leave benefits, either paid or unpaid.  But, if they do, employers must permit employees to use these benefits in accord with the new law.

Bottom Line

The time for action is now.  As noted above, the changes to the Minnesota Parenting Leave Act take effect on August 1, 2013.  Prior to this date, employers who offer personal sick-leave benefits must review and revise their employee handbooks and train supervisors on how to comply this new law.

The post Minnesota Legislature Expands Employees’ Use of Sick-Leave Benefits appeared first on Felhaber Larson.

One significant concern is the fact that we expect a ruling this summer from the U.S. Supreme Court on the federal Defense of Marriage Act (DOMA) which denies married same-sex couples a range of benefits that are available to heterosexual couples. Until then, here are some guidelines for evaluating this change in Minnesota law.

✓  Consider State and Federal Laws When Determining Benefit Policies

Minnesota employers must always first follow all federal laws that have no state equivalent, such as ERISA (Employment Retirement Income Security Act) and its effect on pension plans. Other examples include social security benefits, spousal immigration rights and income tax benefits accorded to married couples.

Where a law has both a state and federal statute on the same topic, or where only a state law exists, protections will now extend to the same-sex spouse. For instance, employers are required under the Family Medical Leave Act (FMLA) to provide 12 weeks of unpaid leave for, among other things, care of a spouse, parent or child with a serious medical condition. Since Minnesota now recognizes same sex spouses, Minnesota employers would have to permit a leave to care for a same-sex spouse or risk liability for discrimination under the Minnesota’s Human Rights Act (MHRA).

Similarly, effective August 1, Minnesota’s law permitting employees to use sick leave to care for sick children has been extended to spouses, parents, siblings, grandparents and stepparents. Clearly, this now includes same sex spouses.

✓  Review Human Resource Policies

The new law also means that human resources policies and manuals should be reviewed to ensure that anything applicable to spouses is appropriately phrased to include those of the same gender. Emergency contact forms, benefit plan enrollment documents and similar items for new employees are likely to require particular attention. In addition, any policies applicable to “spouses” or “married employees” must be applied. Applying these policies differently to same sex couples would likely be viewed as a violation of the prohibition against sexual orientation discrimination in the MHRA.

✓  Provide Leadership Training

Same sex marriage has been the focus of a great deal of attention and discussion in the last year so it might be a good idea to some provide training for supervisors and managers on how it affects their obligations in the workplace. They should understand the rights of same-sex couples and how benefit plans, leave laws and other particular policies might be applied.

Bottom Line

As we said, the Supreme Court’s decision on the impact of DOMA may cut the honeymoon a bit short on same sex marriage in Minnesota. Still, until that time, there are some helpful, tangible steps that employers can take to stay ahead of the curve. Stay tuned for further developments.

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