Minneapolis Amends Recently Enacted Paid-Sick-Leave Law

By Sarah Gorajski and Sebastian Chilco © Littler Oct 12, 2016

Minneapolis has amended its Sick and Safe Time Ordinance less than four months after it was enacted. The amendments come on the heels of neighboring St. Paul, Minn., adopting its own paid-sick-leave law and bring the Minneapolis ordinance more in line with St. Paul's requirements concerning frontloading, payment of employees when on leave, tracking accrual of available paid sick time and recording required information.

The most significant change permits Minneapolis employers to comply with the ordinance by providing a lump sum of sick and safe time at the beginning of the accrual year, also known as frontloading.

Unfortunately, Minneapolis has adopted St. Paul's frontloading standard, creating little incentive for employers to choose a frontloading method. Employers that choose to frontload must provide employees with at least 48 leave hours to use during the first year following the initial 90 days of employment, and at least 80 leave hours beginning each subsequent year.

Employers that opt not to frontload can have employees accrue leave during employment and may cap the annual accrual at 48 hours and limit to 80 hours the amount of sick leave an employee may have available for use.

The amendments modify the rate at which sick and safe time must be paid. Employers with six or more employees must pay their employees their "regular rate of pay" when leave is used, which must be the same hourly rate with the same benefits they would have earned had leave not been taken.

Minneapolis removed the statement that employees are not entitled to lost commissions and tips when on paid sick leave and added a list of payments excluded from an employee's "regular rate of pay."

These include: 1) tips; 2) commissions; 3) reimbursement for expenses incurred on an employer's behalf; 4) premium payments for overtime or work on Saturdays, Sundays, holidays, or scheduled days off if the premium rate is at least one-and-a-half times the normal rate; 5) bonuses; 6) cash or other valuables in the nature of gifts on special occasions; 7) payments made per a bona fide profit-sharing plan or trust or bona fide thrift or savings plan; and 8) contributions irrevocably made by an employer to a trustee or third person per a bona fide plan for providing old-age, retirement, life, accident, or health insurance or similar benefits for employees.

Some of these exclusions may, however, be subject to the terms of the governing plan documents, which may preempt the ordinance and which can be complex.  It may be necessary to review such plans closely with an employee benefits attorney.

Multiple changes were made to Minneapolis's recordkeeping requirements. First, the sick time accrual must be calculated no less frequently than monthly. Second, the information that must be recorded is slightly modified. Employers must now record hours worked (for non-exempt employees) and leave hours available and used for sick and safe time purposes. Third, the requirement to track hours worked in Minneapolis by employees occasionally working in the city has been eliminated.

With almost nine months until the Minneapolis and St. Paul laws take effect—July 1, 2017—there is no immediate need to modify policies. Given that neither city has released frequently asked questions or regulations, more policy-impacting changes are expected.  Businesses with operations or employees working in Minneapolis or St. Paul should monitor agency websites so they can effectively and efficiently implement changes if and when necessary, closer to when the laws take effect.

Sarah Gorajski is an attorney with Littler in Minneapolis. Sebastian Chilco is an attorney with Littler in San Francisco. © Littler. All rights reserved. Reposted with permission.

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