Minneapolis, St. Paul, and Now Federal Contractors: Employers Must Prepare for Various Paid Sick and Safe Leave Laws

Minneapolis and St. Paul passed city ordinances this year requiring mandatory paid sick and safe leave for employees working within the city limits. Today, the Department of Labor issued its Final Rule (“DOL Rule”) mandating paid sick and safe leave for employees of its federal contractors. The impact of such laws is broad and many employers will be affected.

The laws allow employees to use paid sick and safe leave for their own health needs, including preventive care, the health needs of a family member, or for purposes resulting from being the victim of domestic violence, sexual assault, or stalking, or to assist a family member who is such a victim.  The city sick and safe leave laws may also be used for certain events, such as government issued snow days.  Employers may still have policies around its sick and safe leave regarding administration, such as requiring medical certification for absences of three or more days, or for prior notification for foreseeable occurrences.

The city sick and safe leave laws apply to ALL employers who have employees performing 80 hours of work per year within the applicable city, regardless if the employer operates in Minneapolis, St. Paul or in another state (excluding federal, state, county or local governments, other than the City of Minneapolis).  This will significantly impact the health care industry, restaurant and chain establishments, and employers with part-time employees.

The DOL Rule mandating sick and safe leave is required for government contractors, with certain, limited exceptions.  The DOL Rule requires that any employee working on a covered government contract be provided paid sick and safe leave.  It is up to the employer to track if employees are working on government contracts or non-government contracts, otherwise, all hours worked will be presumed applicable for accrual purposes. Please note the DOL Rule contains exemptions for certain employees who spend a minimal amount of time—less than 20 percent in a workweek—working in connection with covered contracts.

All of the sick and safe leave laws allow for coordination with existing PTO policies and collective bargaining agreements, so long as the minimum requirements of each law are met.  The laws prohibit an employer from requiring an employee to find a replacement worker as a condition to using his or her sick and safe leave, and prohibit discrimination or retaliation against any employee for the exercise of his or her rights under the laws.  Further, all employees are entitled to paid sick and safe leave, regardless of the employee’s status as full-time, part-time, salaried, or hourly.  Details of the laws are as follows:

MinneapolisSt. PaulFederal Contractors
Accrue 1 hour for every 30 worked, up to 48 in a year.Accrue 1 hour for every 30 worked, up to 48 in a year.Accrue 1 hour for every 30 worked, up to 56 in a year.
Unpaid leave allowed for employers with 5 or fewer employees.Unpaid leave allowed for “new” employers for the first year after a company hires its first employee.No unpaid leave exception.
Carry over 48 hours into the next year, and allow a total of 80 hours accumulated at one time.Carry over 48 hours into the next year, and allow a total of 80 hours accumulated at one time.Carry over 56 hours into the next year, and no limit on total of hours accumulated at one time.
No cash out, but reinstatement of sick and safe leave after separation and reemployment within 90 days.No cash out, but reinstatement of sick and safe leave after separation and reemployment within 90 days.No cash out, but reinstatement of sick and safe leave after separation and reemployment within one year.
Must record all accrued sick and safe time and used sick and safe time for each day of the work week, for each employee.Must maintain records documenting hours worked by employees and earned sick and safe time used by employees.Must record hours worked for employees performing work on or in connection with any covered contract, and earned sick and safe time used.
Effective July 1, 2017.Effective July 1, 2017 (24 or more employees).

 

Effective January 1, 2018 (23 or fewer employees).

Effective November 29, 2016. Applies to certain contracts where the solicitation for such contract has been issued, or the contract has been awarded outside the solicitation process, on or after January 1, 2017, including contracts renewed, extended, or amended on or after January 1, 2017.

City ordinances offer few exceptions for small employers.  The Minneapolis ordinance requires employers with six or more employees to provide paid sick and safety leave to eligible employees and requires employers with five or fewer employees to allow employees to take unpaid sick and safe leave.  St. Paul’s ordinance does not have an unpaid option for small employers, but it does allow an employer a one-year grace period to provide unpaid leave to its employees for the first year after it hires its first employee.  St. Paul’s ordinance also requires employers who employ temporary workers through a temp agency to provide paid sick and safe leave.

Employers who violate the city-based sick and safe leave will be subject to penalties and other relief, such as employee reinstatement, back pay, and fines paid to both the employee and the city.  The sick and safe leave also provides a civil cause of action for the city attorney to seek additional penalties of injunctive relief, and attorneys’ fees and costs.  DOL penalties are greater, including losing the government contract.

Employers may want to take the time to review their vacation and PTO policies now in anticipation of the change.  In the next several years, certain grace periods to allow for employer implementation will sunset, at which point the employer will be subject to full enforcement.  Contact FMJ early to determine if your company will be subject to the new ordinance in order to have your company’s current PTO or sick leave policies evaluated.

Fafinski Mark & Johnson’s HR & Employment and Litigation groups can be reached at 952.995.9500.

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