Minnesota Employers: State Legislature is Considering Materially Significant Paid Leave, Wage Theft and Sexual Harassment Bills

Multiple pieces of legislation that would materially affect Minnesota employers if passed into law are currently under consideration by the Minnesota legislature. The new bills cover paid family and medical leave, paid sick leave, wage theft and the statutory definition of sexual harassment.

Here’s a summary of the bills and where they currently stand:

Paid Family and Medical Leave - HF5/SF1060

These bills seek to establish a state-run insurance program that would partially reimburse the wages lost when workers take leave to address family or medical issues by creating the Family and Medical Benefit Insurance Division under the authority of the Commissioner of the Department of Employment and Economic Development (DEED).

Under the current version of the House bill, an employee with a “serious health condition” or a “qualifying exigency,” an employee who is pregnant, or an employee seeking “safety leave,” or to provide “family care,” or “bonding” time (all as defined in the bill) may be eligible to apply to the DEED Commissioner for benefits.  

The bill defines a “serious health condition” as an illness, injury, impairment, or physical or mental condition that involves inpatient care in a facility or continuing treatment by a healthcare provider. “Family care” includes caring for a family member with a serious health condition.

A “qualifying exigency” is defined to mean a need arising out of an employee’s family member’s active duty or notice of an impending call to active duty in the U.S. armed forces. “Safety leave” includes leave due to domestic abuse, sexual assault, or stalking of the employee or employee’s family member, provided the leave is for the purpose of seeking certain medical, psychological, legal or relocation services.

The bill defines “bonding time” to include time spent with a child (biological, adoptive or foster), generally within 12 months of the child’s birth, adoption or placement.

If an employee’s application for benefits is approved, then the employee may be eligible to receive a “weekly benefit amount” calculated by a formula set forth in the statute. In a single benefit year, employees may receive up to 12 weeks of benefits related to the employee’s serious health condition, pregnancy, bonding, safety leave or family care.

The employee may receive up to 26 weeks of benefits in a single benefit year for family care of a covered service member or for one or more qualifying exigencies.

The House bill passed through the Commerce Committee after an amendment to the original bill was adopted and was referred to the House Government Operations Committee, where it was heard and passed on February 26, 2019 and then re-referred to the House Ways and Means Committee.

The companion Senate bill is awaiting a hearing in the Senate Jobs and Economic Growth Finance and Policy Committee.

Paid Sick Leave - HF11/SF1597

These bills, which include a number of the same or similar provisions included in the Minneapolis and St. Paul sick and safe time ordinances that have taken effect in recent years, seek to require employers with one or more employees to provide each employee with one hour of paid sick and safe (ESS) time for every 30 hours worked, up to a maximum of 48 hours of ESS time in a year. 

The House bill, which was heard and passed by the House Government Operations Committee on February 26, 2019 and re-referred to the House Ways and Means Committee, includes the following provisions:

• Any person who is employed by an employer, including temporary and part-time employees, who performs work for at least 80 hours in a year for that employer in Minnesota, is entitled to earn ESS time.
• Independent contractors do not earn ESS time.
• Employees must be able to carry over at least 80 accrued hours of ESS time from year to year.
• Accrual of ESS begins when a qualified employee begins employment, but an employee may not begin using ESS time until the employee has worked for the employer for 90 days.
• Salaried employees, who are exempt from the provisions of federal overtime laws, are deemed to work 40 hours of work for purposes of ESS accrual.
• Employees may use ESS time for several purposes, including: (1) the employee’s illness or preventative care; (2) care of a sick family member or family member in need of preventative care; (3) absence related to domestic abuse, sexual assault, or stalking of the employee or family member; (4) closure of the employee’s workplace due to weather or public emergency or closure of a family member’s school or care facility due to weather or public emergency; and (5) a determination by a health care provider that the employee or family member is at risk of infecting others with a communicable disease.
• The law does not prohibit an employer from providing more generous leave policies than the minimum required for ESS time under the law.
• An employer may require reasonable notice of up to seven days when the need for ESS time is foreseeable and require an employee to provide documentation justifying use of three or more consecutive days of ESS time.
• If the need for ESS time is unforeseeable, an employer may require an employee to give notice of the need for earned sick and safe time as soon as practicable.
• Earned ESS time may be used in the smallest increment of time tracked by the employer's payroll system, provided such increment is not more than four hours.
• Employers are prohibited from making employees find replacement workers as a condition of ESS time.
• Employers are prohibited from retaliating against an employee for taking ESS time or for exercising another right under the law.
• An employer must reinstate an employee in the same or comparable position, with the same pay and benefits, after return from use of ESS time.
• Employers must post notice of employee rights under the law, and, upon employee request, provide a statement including the amount of ESS time available to the employee and the amount of ESS time used by the employee.
• Employers are required to keep records about ESS accrual and use, and allow an employee to view that employee’s records.
• Employers are not required to pay out any accrued ESS time upon termination of employment.
• An employee transferred within a single employer retains accrued ESS time and an employee hired back by the same employer within 180 days of termination is entitled to reinstatement of accrued ESS time.
• Earned sick and safe time would be added to the list of laws that the Department of Labor and Industry (DOLI) may enforce through compliance orders.
• The maximum penalty for employers who fail to submit required records to the DOLI would be increased from $1,000 to $10,000 per violation.
• An employee affected by an employer violation of the ESS provisions would be allowed to bring a lawsuit in court, and recover any and all damages recoverable by law, together with costs and disbursements, including reasonable attorney fees, and to receive injunctive and other equitable relief as determined by a court.

The companion Senate bill has been referred to the Senate Jobs and Economic Growth Finance and Policy Committee.

Wage Theft Prevention and Enforcement - HF6/SF1933

These bills address employer “wage theft,” and would change the requirement in current law that an employee be paid at least once every 31 days, to a requirement that employees be paid at least every 16 days.

The bill also would reduce the minimum time after a missed paycheck that the DOLI Commissioner may intercede from ten days to five days.

The current version of the House bill adds to employers’ existing employee records obligations by requiring employers to track: (1) whether each employee is paid by the hour, shift, day, week, salary, piece, commission or other basis; (2) for all employees paid at piece rate, the number of pieces completed at each piece rate; (3) any personnel policies provided to employees; and (4) a copy of a written notice to be provided to each employee at the start of employment containing the following information: 

• 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
• Allowances, if any, claimed pursuant to permitted meals and lodging
• Paid vacation, sick time, or other paid time off accruals and terms of use
• Whether the employee is exempt from minimum wage, overtime, and other provisions of Minnesota Statutes Chapter 177, and on what basis
• A list of deductions that may be made from the employee's pay
• The dates on which the pay periods start and end and the regularly scheduled payday
• The legal name of the employer and the operating name of the employer if different from the legal name
• The physical address of the employer's main office or principal place of business, and a mailing address if different
• The telephone number of the employer

The House bill requires that all records be available for inspection during business hours and increases the maximum fine for failing to maintain records from $1,000 to $10,000 and also adds employer “wage theft,” which includes failing to pay an employee all earned wages, and retaliation for asserting rights under the statutory section, to the existing list of “prohibited practices.”

The bill further provides that the DOLI Commissioner will enforce the law, and may do so by (1) directing the employer to pay the DOLI Commissioner any back pay, gratuities and compensatory damages owed to the employee within 15 days; (2) requiring the employer to correct the violation and/or cease and desist from committing the violation; and/or (3) assessing a monetary penalty of up to $1,000.

The DOLI Commissioner must vacate any citation if, before the citation was issued, the employer corrected any payment deficit and provided evidence of the correction to the DOLI Commissioner within five days of the citation issuance. The House bill also provides a mechanism for administrative review of any citation issued against an employer.

The House bill has been referred to the House Judiciary Finance and Civil Law Division Committee. The companion Senate bill has been referred to the Senate Jobs and Economic Growth Finance and Policy Committee.

Sexual Harassment Definition - HF10/SF1307

These bills seek to change the statutory definition of sexual harassment by explicitly stating that creating an intimidating, hostile or offensive environment does not require the harassing conduct or communication to be severe or pervasive.

Currently, Minn. Stat. 363A.03 subd. 43 defines sexual harassment to include “unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature” when

1. Such conduct or communication is made a term or condition of employment
2. The submission to or rejection of that conduct or communication is used as a factor in decisions affecting the individual’s employment, public accommodations, public services, education or housing or
3. The conduct or communication has the purpose or effect of substantially interfering with an individual’s employment, public accommodations or public services, education or housing, or creating an “intimidating, hostile, or offensive employment, public accommodations, public services, education, or housing environment”

The House bill was passed on a unanimous vote by the House Judiciary Finance and Civil Law Division. Its next stop is a House floor vote. The Senate bill is with the Senate Judiciary and Public Safety Finance and Policy Committee.

These bills represent a concerted effort by the sponsoring lawmakers to address the decades-old “severe or pervasive” standard applied to sexual harassment claims. The “severe and pervasive” standard was developed from Harris v. Forklift Systems, a 1986 U.S. Supreme Court case.

The case marked the first time a sexual harassment case made it all the way to the Supreme Court, and established that harassment that was so “severe or pervasive” that it affected the conditions of the victim’s employment and created a hostile working environment would be actionable under Title VII.

In subsequent years, Minnesota federal and state courts have applied the “severe and pervasive” standard in evaluating the viability of sexual harassment claims under U.S. and Minnesota law.

In a December 2017 Hennepin County District Court case, the plaintiff alleged her male coworker created a hostile work environment. The Hennepin County District Court judge assigned to the case granted summary judgment for the defendant employer, concluding the plaintiff’s allegations did not meet the severe or pervasive standard set forth in case law. However, the judge stated: 

Our courts need to revisit the issue of what facts constitute those sufficiently severe or pervasive acts to alter the conditions of the victim’s employment and create an abusive working environment. Cases which emanate from the 1980’s, 1990’s, or even the first decade of the present millennium no longer accurately reflect conduct that alters the conditions of a victim’s employment and creates an abusive working environment. Times change, and with them so too do the standards of conduct. This Court doubts that anyone would reasonably find some conduct, once found unactionable, is still unactionable today. . . . There has been a sea-change in cultural attitudes toward sexual harassment. . . . It is not a leap to say that gone are the days when men can use the workplace to further their prurient interests. Unwanted sexual advances, belittling sexual banter, touching, and mocking sexual language are no longer viewed as merely boorish, obnoxious, chauvinistic, or immature—they should be actionable.

Following this order, bills were introduced in the Minnesota House and Senate during the 2018 legislative session, proposing to modify the definition of sexual harassment to provide that an intimidating, hostile or offensive environment under Minn. Stat. 363A.03 subd. 43(3) does not require the harassing conduct or communication to be severe or pervasive. 

These bills did not advance through House or Senate committees in 2018, but the issue has now been re-introduced in this legislative session through the above-identified bills.