2024 Amendments to the Minnesota ESST Statute

In the closing minutes of the 2024 legislative session, the Minnesota Legislature passed a 2,800 page bill that included several significant changes to the Minnesota’s Earned Sick and Safe Time (ESST) law.  The law made several significant changes to the ESST statute that are effective immediately and a significant change to PTO policies that is effective January 1, 2025.

Earnings Statements and Records

Many employers invested considerable time, energy and expense to report available and used ESST hours on employees’ paystubs.   The law has been changed to make it “easier” to report this information.

Specifically, at the end of each pay period, an employer must provide in writing, or electronically, information stating the employee’s current amount of ESST available for use and the number of hours used during the pay period.

Employers may choose a “reasonable system” for providing this information which includes reporting on earning statements (which was previously required) or by providing access to electronic system with the information (along with the requirement that an employer-owned computer with a printer must be available).    ESST records must be kept for three years and be available for inspection upon demand by MN-DOLI.

This change is effective immediately.

Changes to “Rate of Pay”

Employers were particularly frustrated with how ESST was paid.  Under the prior ESST statute, ESST was required to be paid “at the same hourly rate as the employee earns from employment.”  This meant that shift differentials and holiday pay rates arguably needed to be paid on ESST-qualifying hours.

As amended, the ESST statute requires ESST to be paid at the employee’s “base rate.”  The “base rate” is defined to mean:

    1. for employees paid on an hourly basis, the same rate received per hour of work;
    2. for employees paid on an hourly basis who receive multiple hourly rates, the rate the employee would have been paid for the period of time in which leave was taken;
    3. for employees paid on a salary basis, the same rate guaranteed to the employee as if the employee had not taken the leave; and
    4. for employees paid solely on a commission, piecework, or any basis other than hourly or salary, a rate no less than the applicable local, state, or federal minimum wage, whichever is greater.

The amended statute also makes clear that “base rate” does not include: “commissions; shift differentials that are in addition to an hourly rate; premium payments for overtime work; premium payments for work on Saturdays, Sundays, holidays, or scheduled days off; bonuses; or gratuities . . . .”

This change to the ESST law is effective immediately.

Exclusions Certain Workers

The existing 80-hour threshold for “employee” status has been changed to include a person who is “anticipated” by the employer to perform work in Minnesota for at least 80 hours in a year.     The new definition of employee also excludes volunteer firefighters, elected officials, and certain farm employees (who work less than 28-days per year).

This change to the ESST law is effective immediately.

Documentation May Be Required After Three Consecutive “Scheduled” Absences

The amended ESST law provides that an employer may require documentation substantiating an employee’s absence if the employee uses ESST “for more than three consecutive scheduled work days . . . .”

This change to the ESST law is effective immediately.

Funeral Leave Is Added

A new, permitted use of ESST includes the need to make arrangements for or to attend a funeral service or memorial, or address financial or legal matters that arise after the death of a family member.

This change to the ESST law is effective immediately.

15-Minute Increments for ESST Use

When the ESST law was first passed in 2023, ESST could be used in the “smallest increment of time tracked by the employer’s payroll system.”  For most employers, this meant that non-exempt workers could use ESST in as little as one or seven-minute increments.

As amended, the ESST statute makes clear that ESST may be used in the “same increment of time for which employees are paid, provided an employer is not required to provide leave in less than 15-minute increments nor can the employer require use of earned sick and safe time in more than four-hour increments.”

This change to the ESST law is effective immediately.

Weather/Emergency Event Exception

Certain employees, i.e., those whose jobs entail or may entail responding to weather events and public emergencies, are excepted from ESST use for similar reasons.

Effective January 1, 2025, More Generous Time Off Programs Are Impacted by ESST

From our perspective, the most significant and substantive change to ESST relates to time off programs that provide benefits to employees that exceed the minimum ESST requirements.

Under the prior law, employers that had more generous paid time off policies were not required to comply with the ESST statute (including documentation and protection from retaliation) for leave that is more than the 48 hours (or 80 hours) minimum.

Under the amended statute, which is effective January 1, 2025, all employer-provided leave will be converted into protected ESST time – even if the paid leave exceeds 48 or 80 hours – provided that the employee uses the time for the employee’s own “personal injury or illness.”  Here is the text of the amendment:

No Effect on more generous sick and safe time policies.

(a) Nothing in sections 181.9445 to 181.9448 shall be construed to discourage employers from adopting or retaining earned sick and safe time policies that meet or exceed, and do not otherwise conflict with, the minimum standards and requirements provided in sections 181.9445 to 181.9448. All paid time off and other paid leave made available to an employee by an employer in excess of the minimum amount required in section 181.9446 for absences from work due to personal illness or injury, but not including short-term or long-term disability or other salary continuation benefits, must meet or exceed the minimum standards and requirements provided in sections 181.9445 to 181.9448, except for section 181.9446. For paid leave accrued prior to January 1, 2024, for absences from work due to personal illness or injury, an employer may require an employee who uses such leave to follow the written notice and documentation requirements in the employer’s applicable policy or applicable collective bargaining agreement as of December 31, 2023, in lieu of the requirements of section 181.9447, subdivisions 2 and 3, provided that an employer does not require an employee to use leave accrued on or after January 1, 2024, before using leave accrued prior to that date.

Under the amendment, employer documentation requirements (such as requiring doctor’s note or 24 hours’ notice) would apply only to time that accrued prior to 2024 and only if those requirements existed prior to January 1, 2024.

Again, this amendment is effective on January 1, 2025.

Bottom Line

In light of the foregoing changes to the ESST laws, it is important to “dust off” your ESST policies to ensure compliance with these new legal requirements.

For employers who provide generous amounts of sick time or PTO, it may be time to make changes to those policies to limit the impact of the changes to more generous policies on January 1, 2025.  For example, an employer could consider dividing a generous PTO policy into sick time (subject to ESST) and vacation time (not subject to ESST).

We will continue to monitor this development.