The Minnesota Sick and Safe Time law went through several revisions, but the biggest changes will affect: (1) bereavement leave; (2) increments of time employees may use; and (3) protections extended to more generous time-off policies.
Effective immediately, employees can use accrued sick and safe time for the "need to make arrangements for or attend funeral services or a memorial, or address financial or legal matters that arise after the death of a family member." Employers providing a more generous bereavement leave policy can continue to do so, but employees will have the ability to use accrued time off once bereavement time has been exhausted.
Over the past year, employers grappled with required and appropriate increments of sick and safe time use. The relevant statutory provision was updated to state, "[e]arned sick and safe time 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." Employers will want to review and update policies and practices on minimum increments of use to align with this update.
The most significant change for employers to take note of relates to all paid time off. Effective Jan. 1, 2025, sick and safe time statutory protections will extend to all forms of paid time off that employees are able to use for injuries and illnesses. These protections include, but are not limited to: documentation, advance notice, replacements, and most importantly, anti-retaliation.
Employers that offer generous Paid Time Off (PTO) allotments to satisfy earned sick-and-safe time requirements will need to extend the statutory protections to employees' entire balance of accrued PTO. Similarly, employers that maintain separate sick and vacation allotments will also need to extend the statutory protections to the allotment of vacation hours unless employees are prohibited from using that time for illness and/or injury. This change will also impact unlimited PTO policies by eliminating an employer's ability to discipline an employee for abusing sick time off. We recommend employers review attendance and paid time off policies to ensure legal compliance.
Minnesota Pregnancy and Parental Leave Act.
The Minnesota Pregnancy and Parental Leave Act now requires employers to continue providing insurance benefits as if the employees were not on leave. If an employer pays a portion of insurance premiums prior to leave, the employer must continue to make the same payments while the employee is on leave. This practice is already required under the federal Family Medical Leave Act. Relatedly, the same coverage continuation and cost-sharing protections will also apply to employees taking leave as a pregnancy accommodation. Employers with policies that require employees to pay the entire premium — employee-paid portion as well as the employer-paid portion — during leave will need to revise their policies and practices by Aug. 1, 2024.
Minnesota Paid Leave.
The Minnesota Paid Family Leave Act, which is now referred to as "Minnesota Paid Leave" also went through several revisions. As a reminder, quarterly wage reports will be due this October in preparation for the 2026 program launch.
The Minnesota Paid Leave law had initially provided for a 0.7% payroll tax on employers that included a cost-sharing provision permitting employers to impose half of the tax on employees. After the legislature received a report which showed the original contribution rate was far too low to administer the program, the tax was adjusted to 0.88%.
The revisions also included a small employer premium reduction for employers with 30 or fewer employees that pay an average wage to employees equal to or less than 150% of Minnesota's average wage. Small employers will also have the ability to apply for grants to hire temporary employees or increase existing employees' pay while an employee is on leave.
One of the more substantial changes was the addition of a detailed mechanism to appeal commissioner determinations. When the law was initially passed in 2023, it provided that employers could satisfy the requirements through a private plan approved by the state. Importantly, these highly detailed appeal rights will now apply to private plans as well. In addition, private plans cannot charge employees more than what they would pay for state coverage (half of the tax). Final determinations made by the state-appointed hearing officers are also now appealable at the Minnesota Court of Appeals.
Last, private plans must also extend leave rights to former employees until the individual is hired by a new employer or 26 weeks pass, whichever occurs first. Further, the leave cannot be cut off. For example, if a terminated employee applies for leave due to having a baby 24 weeks after termination, the entire leave must be approved if that employee has not been re-employed.
Employers who already have fully paid parental and/or family medical leave policies will have to determine how to modify existing policies and whether current policy language restricts what changes can be made. Despite these legislative changes, it is still possible for employers to receive pre-approval on private plans and self-administer with careful attention to the law. Another option is to utilize the state-administered coverage and amend existing plans to supplement the state coverage.
Shadow Non-Compete Ban.
Partnerships, associations, corporations, businesses, trusts, or groups acting as an employer or manager for work contracted or requested by a customer (Service Providers) can no longer prohibit, restrain, or restrict a customer from directly or indirectly soliciting or hiring an employee of the Service Provider. The new law goes one step further by requiring Service Providers to provide notice to employees when a provision in an existing contract violates this new law. This law goes into effect on July 1, 2024.
Policy Updates and Statutory Compliance.
The author of this alert will issue a follow-up alert the week of July 1, analyzing other important employment highlights from the 2024 Minnesota Legislative Session. Please reach out to a Taft Employment and Labor Relations attorney with questions or assistance determining whether any legislative changes affect a company's policies and practices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.