A recent change in Minneapolis work law could affect your business -- even if your headquarters, facilities, or office(s) are not located inside the city.
A new ruling by the Minnesota Court of Appeals on June 7th, 2019 states that Minneapolis's amended Sick and Safe Time Ordinance now applies to employers outside Minneapolis when an employee works for them within city limits at 80 hours or more per year.
This applies to all types of employees: exempt, non-exempt, part-time, full-time, management, non-management, and regardless of how they are paid whether they are salaried, hourly, commissioned, or paid any other way. The law also applies to employers of all sizes, whether they have one employee or hundreds.
How does it affect your business?
To understand that, let’s understand what the law says first.
Employers are now Required to Provide Sick and Safe Time Backdated to July 1st, 2017
Originally, the law affected only businesses that had a physical location, facility, office etc. in Minneapolis. The portion of the law relating to employers located outside of Minneapolis but whose employees worked within Minneapolis was being appealed.
In May 2016, Minneapolis enacted the first sick and safe time ordinance in Minnesota (the City of Saint Paul has one as well). This ordinance defined an employee as “any individual employed by an employer . . .who performs work within the geographic boundaries of the City for at least eighty (80) hours in a year.” 1
This prior version of the Sick and Safe Time (SST) Ordinance provided for protected sick and safe time for covered employees, required employers to track the accrual and use of leave time, and, for employers of six or more employees, mandated that SST be paid. Employers with five or fewer employees could opt to make the time paid or not. Again, this was limited in scope to businesses within city limits.
Now, thanks to this update, Minneapolis's SST law states that any individual who works for any employer for at least 80 hours a year within the City of Minneapolis is entitled to sick and safe time from their employer--even when that employer isn't located within the city limits.
The Minneapolis Department of Civil Rights began enforcement for "non-resident" employers on July 3rd, 2019.
How must/can employers comply? Two ways.
- Crediting covered employees with sick and safe time at a rate of 1 hour per 30 hours worked in the city, capped at 48 per year and 80 hours overall
- Front-loading a lump sum of 48 hours for the first year of the employee’s employment and 80 hours at the beginning of every year thereafter (also capped at 80 hours)
Employers may therefore comply with the ordinance without individual historical calculations by crediting each covered employee with 80 hours of accrued Sick and Safe time.
If a “non-resident” employer provided its employees, between July 1, 2017 and the present, a paid time off or paid leave plan which was available for uses including illness, and the employer is now adapting that plan to comply with all Sick and Safe ordinance requirements, the employer may deduct an employee’s actual use of that paid time off or leave since July 1, 2017 from the amount of accrual for that employee required under the Sick and Safe Time ordinance.
Sick and safe time is defined as time spent away from a job due to illness or injury, medical treatment or preventative care, domestic or sexual assault, or care of a family member. It is to be compensated at normal rates of pay.
Compliance Can Be Confusing
This change in the law doesn’t just affect employers going forward, it’s written as such that it backdates to July 1st, 2017 -- which could mean big problems for your company if you’re not in compliance with it. The City of Minneapolis has a page dedicated to employers for how to make sure they’re in compliance with the new proposed changes. These include the new rules, an employer checklist, an FAQ, and an Accrual and Use tracking Spreadsheet so that you can track the hours each employee has earned of its sick time.
Here's a checklist from the City of Minneapolis to help you navigate your obligations.
This is a Contentious and Unfinished Story
The original plan to have this rule apply to employers outside city limits was stopped by an injunction that dissolves unless the decision is appealed to the Minnesota Supreme Court. That appeal seems likely, but it’s still up in the air as to what will happen. While you can take a “wait and see” approach, the fact that this law has been on such a quick timetable means that your company may need to come under compliance sooner rather than later. Not doing anything can cause you to be caught in the wind and suffer from expensive and time-consuming actions or lawsuits from current and former employees... It is currently law and enforcement began for non-resident employers on July 3rd, 2019.
Talk to Your Payroll & HR Solutions Experts to Make Sure You’re Compliant Today
A good payroll and HR solutions company will stay up to date on these laws and provide you with the necessary advice and strategies to plan for these changes going forward. If you have questions about this law, we recommend you contact that person today. If you don’t have one yet, speak with one of our advisors today and learn what CSI can do to make sure you’re hitting these checkmarks.
We specialize in accounting, bookkeeping, taxes, payroll, and HR solutions for small businesses. Part of our full-service local payroll includes top notch HR Solutions that are very affordable and customizable for your business. Don’t go into these uncharted waters alone; you need someone with the experience, knowledge, and skills to make sure that your business can stay afloat.
1 “The Battle over the Minneapolis Sick and Safe Time Ordinance Continues: Court Holds the Law Applies to Employers Outside City Limits” Joe Weiner, Shirley Lerner, Sebastian Chilco, May 6, 2019. https://www.littler.com/publication-press/publication/battle-over-minneapolis-sick-and-safe-time-ordinance-continues-court
