1. Navigating Minnesota’s paid sick leave laws – creating a policy that works
Presented by:
Heather kaiser, jd
HR consultant

2. National Trends & Minnesota Developments
agenda
National Trends & Minnesota Developments
Minneapolis and St. Paul Sick Leave Rules
Implementation

3. National trend on paid sick leave
Wisconsin cities won’t be a target – law passed in 2011 preempting any existing city laws (Milwaukee) and keeping it so only state could take action. No proposed measures.

4. Minnesota Developments
Municipalities preemption bill defeated by Governor Veto: legislature had sought to prevent cities from enacting labor laws like minimum wage and sick leave (however, legislature was able to overturn Minneapolis’ ban on plastic bags…)
Minneapolis and St. Paul implemented a sick/safety leave effective 7/1/17
Duluth started study exploring similar law

5. Minnesota Developments
Minneapolis ordinance initially covered any employer, regardless of location, if an employee worked within city limits
Chamber of Commerce et al brought a lawsuit challenging the ordinance
In January, the district court ruled the city could move forward with the ordinance, but the ordinance did not apply to companies based outside of Minneapolis
City of Minneapolis Appealed;
Affirmed on September 18

6. Minnesota Developments
Chamber’s main arguments were that state law covers sick leave and prohibits the additional requirement of municipal sick-leave on businesses, the city lacked authority, and that it extended too far
Appeals Court affirmed the existence of the ordinance, but that it could not extend to non-resident businesses
The Chamber intends to appeal the matter to the Minnesota Supreme Court

7. Mpls & st. Paul sick & safety leave
(For now) Who’s covered and who’s eligible for paid leave
Mpls - employers with 6 or more employees and operate within the city
St. Paul – employers with 24 or more employees (all employers starting 1/1/28) and operate within the city
Covered employees are those who work 80 or more hours in the city

8. Mpls & st. Paul sick & safety leave
1 hour of paid leave accrues for every 30 hours worked
Maximum annual accrual is 48 hours
Unused time rolls into next year with maximum leave band capped at 80 hours
Time starts accruing immediately upon hire, but 90-day waiting period can be imposed before it can be used
Unused time does not have to be paid out upon termination, but employees rehired within 90 days must have balances reinstated

9. Mpls & st. Paul sick & safety leave
Employees can be required to provide at least 7 days of notice for foreseeable absences
Employees can’t be required to find subs for the shifts they will be missing
A mandatory poster will be created, and a notice of leave rights must be included in employee handbooks
Employers can substitute their current PTO / sick practices, so long as they’re at least as generous

10. Mpls & st. Paul sick & safety leave
Front-Loading
Front-loading is an alternative method of accrual for employers who want to reduce the calculations and record keeping of per-pay-period
Give 48 hours for first year of employment and 80 hours automatically each subsequent year

11. Mpls & st. Paul sick & safety leave
Advancing
Advancing accrual for employers based on expected hours (e.g. providing 10 days of at the beginning of the year PTO)
Must still meat all requirements (1/30, 48 hours annual, carryover, and 80 cap)
Must still maintain calculations and record keeping of per-pay-period
Fulfills all accrual and carryover requirements

12. Mpls & st. Paul sick & safety leave
Advancing – Scenario by the City of MPLS
Mumtaz is a business owner who employs Sara and provides sick and safe time hours per year. At the beginning of Sara’s employment, Mumtaz provides Sara 48 hours. Sara does not use any of these hours and the hours carry-over into the next benefit year. At the beginning of the second benefit year, Mumtaz adds an additional 32 hours, up to the 80 hour overall cap. During the second benefit year, Sara uses 70 hours.
At that point in time, Mumtaz could provide Sara 16 hours (before reaching the 48 hours benefit year cap) or allow Sara to accrue one hour for every 30 hours worked (up to the 48 hours benefit year cap).

13. Mpls & st. Paul sick & safety leave
Front loading
80 hours every year
No reductions for part-time employees
Employers only have to record once a year and do not have to carryover from year to year (no calculations or records of use)
Employees get immediate access to the front-loaded hours a the beginning of each year and do not accrue hours throughout the year
Satisfies the compliance requirement of both 48 hours per year and carryover with the 80 hours
Higher cost long-term, depending on your paid time off policy
Advancing
Hours based on time worked
Can account for reduced hours of part-time employees
Calculations required and records maintained
Employees get immediate access to the advanced hours at the beginning of the year and do not accrue hours throughout the year
Satisfies the compliance requirement for time accrued, but must still allow carryover and new accrual
Employees know what they have to use and account for, less guessing, better planning
Cost-controlled

14. Implementation
How does your company approach paid time off?
Sick (and safe?) time
No paid time off
PTO of 40 hours or fewer, no sick time
A combination of PTO and sick time of 40 hours or fewer
PTO of 80 hours or more
A combination of PTO and sick time of 80 hours or more
How does your company approach the variations in sick and safe leave requirements in different jurisdictions?
One policy that applies to all jurisdictions.
One primary policy with addendums for jurisdictions that have special requirements.
Two or three versions that account for most of the jurisdictions.
Separate policies for each jurisdiction that has its own requirements.

15. Scenario one: no paid time off or sick leave
Implementation
Accrue at least 1 hour for every 30 up to 48 hours
Advance based on number of hours expected to work
Record keeping for tracking amount accrued and amount used
Scenario one: no paid time off or sick leave
or sick leave only

16. Scenario two: paid time off only
Implementation
Advance based on company policy (is it enough time?)
New hires - consider whether the awarded PTO is enough and when it can be used
Revise policy to reflect that it accounts for city sick leave
Standard record keeping for tracking amount accrued and used
Scenario two: paid time off only
(advanced)

17. Scenario three: paid time off only
Implementation
Accrue at least 1 hour for every 30
New hires - consider whether the awarded time is enough and when it can be used
Revise policy to reflect that it accounts for city sick leave
No requirement for reason of use
Record keeping for tracking amount accrued and amount used
Scenario three: paid time off only
(accrued)

18. Sample PTO policy language
Implementation
All paid sick and safe leave required to be accorded to employees under federal, state, and local laws and ordinances must be taken as part of PTO, so use of PTO should be planned accordingly.
Sample PTO policy language

19. Scenario four: paid time off and sick leave
Implementation
E.g. advancing 10 PTO and 3 sick days
Sick and PTO can be combined
Once an employee uses his/her 3 days, their 4-6th days come from the PTO bank
Advance based on number of hours expected to work
Half time employee gets advanced half the time
Record keeping for tracking amount advanced, accrued and amount used
Scenario four: paid time off and sick leave
(advanced)

20. Scenario five: paid time off and sick leave (accrued)
Implementation
Sick and PTO can be combined
E.g. – accrue 1/30 PTO and 1/40 sick time will be sufficient because the PTO is applied to the sick leave
Record keeping for tracking amount accrued, amount used, and type used
Scenario five: paid time off and sick leave (accrued)

21. Special Considerations: variations among jurisdictions
Implementation
State and Local Variations
Covered employees
Covered family members
Permissible uses of leave
Accrual rate
Accrual cap
Usage cap
Minimum time increment for use of leave
Carry over requirements
Rate of pay
Treatment of new employees (accrual and use)
Reinstatement of leave balance upon rehire
Notice requirements
Special Considerations: variations among jurisdictions

22. Special Considerations: multiple sick leave eligibly
Implementation
If an employee works in multiple jurisdictions, sick and safe leave will not accrue in each jurisdiction once the combined total maximum accrual is reached for the most favorable jurisdiction to employee
“Highest common denominator” approach - providing all employees with the greatest amount of sick time required under the most liberal law applicable to your operations
Special Considerations: multiple sick leave eligibly

23. Special Considerations:
Implementation
For employers with sick time and PTO, with the carryover sick time – use matters
So long as you allow a carryover of (#) hours, whether PTO or sick time, or a combination, it will be sufficient
80 hour cap on carryover + accrual
Special Considerations:
carryover

24. Special Considerations:
Implementation
Separate record tracking for amount accrued and used
Separate matrix for multiple jurisdictions
Consider tracking technology
Special Considerations:
Part-time employees

25. Special Considerations:
Implementation
Update your policies to reflect that the company will discipline if it suspects abuse of leave use
Special Considerations:
Abuse of use

26. Implementation Resources Payroll Tracking STD paid time off management
Many use spreadsheets which is timely and more likely to have errors
Payroll Tracking
Companies like ABRC connect you with the right vendors and ask the technical questions that identify the best solutions based on your size, scope and budget
STD paid time off management
Some STD offer paid time off management (still self-funded)

27. Questions / ABRC resources
Upcoming webinars (FREE SHRM and HRCI credit):
Intro to benefits administration part I: Implementing new hire benefits and key benefit concepts (Oct.18) 2 CEU
HR technology consulting services (Oct. 24, Nov. 21, or Dec. 5)
Intro to benefits administration part II: Administering employee changes, payroll and tax considerations and more (Oct. 25) 2 CEU
Wage and hour: Beyond the basics of calculating overtime (Oct. 26) 1.5 CEU
Recent developments in HR and benefits law (Oct. 27) 1 CEU
How to explain the Medicare puzzle to your employees aged 65+ and still working (Nov. 2) 1.5 CEU
Risk management compliance audits
Employee benefit consulting and tools
HR Hotline for clients of ABRC (guidance, templates documents, FLSA flowcharts)
Onsite training for managers and employees
Employee handbooks
Safety consulting
Heather Kaiser, J.D., HR Consultant