Legislation Introduced That Would Require All Minnesota Employers to Provide Paid Sick Leave

On February 2, 2015, legislation was introduced in the Minnesota Senate (Senate File No. 481) and the Minnesota House of Representatives (House File No. 549) that would require all Minnesota employers to provide nearly all employees with paid sick and safe time. The proposed legislation would also expand the coverage of existing pregnancy and parenting leave laws and increase the amount of civil penalties that may be imposed on employers for violating such laws.

Proposed Legislation Could Have Significant Impact on Minnesota Employers

If enacted into law, this proposed legislation would have a significant impact on all Minnesota employers. Minnesota would join the small minority of states (California, Connecticut and Massachusetts) that have passed laws requiring employers to provide paid sick leave to their employees. Unlike the laws recently enacted in Connecticut and Massachusetts, which apply only to employers with at least 50 and 11 employees, respectively, this proposed legislation would require all employers in Minnesota to provide paid sick and safe time (hereinafter referred to as paid sick leave) to their employees. Even those employers who already provide paid sick leave benefits to their employees would need to review their sick leave policies and practices (and pay records) to ensure compliance with this law.

Further, the proposed legislation, if enacted into law in its present form, would impact small employers in particular. Currently, employers that employ less than 21 employees at any one site are not subject to Minnesota pregnancy and parenting leave laws (which were amended as part of the Women’s Economic Security Act (WESA) in 2014 to increase the required leave period to 12 weeks) or the Minnesota pregnancy accommodation law (which also was enacted as part of WESA in 2014). The proposed legislation would expand the coverage of these laws to all employers that employ one or more employees. In addition, the proposed legislation would make it easier for employees to qualify for such leave rights.

Finally, the proposed legislation would bestow new powers on the Minnesota Department of Labor & Industry (DOLI), which is charged with enforcing certain labor and wage laws. Among other things, the proposed legislation would give DOLI the power to adopt rules relating to a number of leave laws, including paid sick leave, and allow DOLI to impose increased civil penalties on employers that violate various leave laws and certain other labor laws.

The Proposed Legislation

Below is a summary of the proposed legislation, as introduced on February 2, 2015:

1. The bill would require all Minnesota employers to provide paid sick leave to almost all employees; provided, however, that employers with a paid leave policy, such as a paid time off (PTO) policy, that meets or exceeds the minimum requirements imposed by the paid sick leave law need not provide any additional paid sick leave.
   • Under the proposed legislation, each employee who has performed at least 680 hours of work for the employer or who has worked for that employer for at least 17 weeks, would accrue a minimum of one hour of paid sick leave for every 30 hours worked for that employer.
      
   • Employees working for employers with 21 or more employees would not accrue more than 72 hours of paid sick leave in a calendar year, unless the employer agreed to a higher amount.
      
   • Employees working for employers with less than 21 employees would not accrue more than 40 hours of paid sick leave in a calendar year, unless the employer agreed to a higher amount.
      
   • Employees who are exempt from overtime requirements under the Fair Labor Standards Act would be deemed to work 40 hours in each work week for purposes of accruing paid sick leave, except that an employee whose normal work week is less than 40 hours will accrue paid sick leave based upon the normal work week. 
      
   • Paid sick leave would begin to accrue at the commencement of employment. 
      
   • Employees could begin to use accrued paid sick leave beginning 90 days following the start of their employment.
      
   • Employees could use accrued paid sick leave for:
     • The employee’s (a) mental or physical illness, injury or health condition, (b) need for medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition, or (c) need for preventive medical or health care;
        
     • Care of a family member (which is very broadly defined and includes any “regular member of the employee’s household”) with a mental or physical illness, injury or health condition who needs (a) medical diagnosis, care or treatment of a mental or physical illness, injury or health condition, or (b) preventive medical or health care;
        
     • Closure of the employee’s place of business due to weather or other emergency, or the employee’s need to care for a child whose school or place of care has been closed due to weather or other public emergency; or
        
     • Certain absences due to domestic abuse, sexual assault or stalking of the employee or employee’s family member.
        
   • Employers could require the employee to provide notice prior to using paid sick leave (but not more than seven days’ advance notice) when the use of the paid sick leave is foreseeable.
      
   • Employers could require reasonable documentation to substantiate that the use of paid sick leave was for a permitted reason only if the employee were to use more than three consecutive days of paid sick leave.
      
   • Employers could not require that the employee seek or find a replacement worker to cover the hours during which the employee uses paid sick leave. 
      
   • Employers would be prohibited from retaliating against an employee who requested or used paid sick leave or who made a complaint or filed an action to enforce their sick leave rights.
      
   • Employers would be required to provide employees with notice of their rights and remedies under the paid sick leave law, including in the employer’s employee handbook, if applicable.
      
   • Employers would be required to disclose in the employee’s earnings statement each pay period the amount of paid sick leave available for the employee’s use.
      
   • An employer would not be required to pay the employee for unused paid sick leave upon the termination of their employment. However, if the employee were rehired by the same employer within 12 months of his/her separation from employment for any reason, then previously accrued and unused paid sick leave must be reinstated and the employee is eligible to use such paid sick leave immediately.
      
   • Because the proposed statutory language identifies the maximum number of hours of accrued paid sick leave that may accrue “in a calendar year,” it is not clear whether an employer must permit an employee to carry over unused paid sick leave from year to year or could adopt a cap on accrued leave policy or an annual “use-it-or-lose-it” policy with respect to paid sick leave.
      
2. The bill would expand the coverage of Minnesota laws addressing sick leave, pregnancy/parenting leave and accommodations for pregnant employees.
   • Currently, these laws apply only to those employers with 21 or more employees at one worksite. The proposed legislation would make these laws applicable to all employers regardless of the number of employees.
      
   • In addition, the rights provided by these laws are currently available only to those employees who (1) have worked for the employer for at least 12 months preceding the request for leave and (2) have worked an average number of hours per week equal to one-half the full-time equivalent position during the preceding 12 months. The proposed legislation would make these leave rights available to any employee who has either performed at least 680 hours of work for that employer or has worked for the employer for at least 17 weeks.
      
3. This legislation would increase the amount of potential civil penalties that DOLI could impose on employers that violate various Minnesota labor laws.
   • The bill would authorize DOLI to levy a civil penalty of up to $1,000 per violation on an employer that is found to have violated certain laws.
      
   • The bill would require DOLI to order a civil penalty of up to $10,000 per repeated or willful violation (an increase from the current maximum penalty of $1,000 per such violation).
      
4. The legislation would authorize DOLI to adopt rules to carry out the purposes of Minnesota leave laws, including paid sick leave, pregnancy/parenting leave and school conference/activities leave, as well as recent laws relating to breaks for nursing mothers and accommodations for pregnant employees.
    
5. This legislation would require DOLI to submit an annual report to the legislature that provides (a) a list of all violations of certain laws enforced by DOLI, including the name of the employers and the nature of the violations, and (b) an analysis of non-compliance with such laws, including any patterns by employer, industry or county.
    
6. The bill would authorize DOLI to make grants to community organizations for the purpose of outreach to and education for employees regarding their rights under laws mandating breaks for nursing mothers and paid sick leave for nearly all employees.

Status of Proposed Legislation

Senate File 481 has been referred to the Senate’s State and Local Government Committee. To date, a hearing on the bill has not been scheduled.

House File 549 has been referred to the House’s Committee on Commerce and Regulatory Reform. To date, a hearing on the bill has not been scheduled.

We will monitor these bills closely and provide further information as the circumstances warrant.

For more information about the potential effect of this legislation, contact one of the authors of this legal update or another member of Faegre Baker Daniels’ labor and employment practice.

For further information about this and other developments at the Minnesota Legislature, contact a member of Faegre Baker Daniels’ governmental relations practice.

(This article was updated on February 5, 2015, to include information about House File No. 549.)