The new Paid Sick and Safe Time Ordinance (“the Ordinance”) for the City of Minneapolis goes to a public hearing on May 18 and then a final vote by the City Council on May 27. If adopted, the Ordinance will be effective July 1, 2017.
The Ordinance promises to cast a significant and as yet imprecise shadow over employers with any degree of presence in Minneapolis. The components of this new Ordinance (and a few salient observations about them) are as follows:
Coverage
The Ordinance covers all employers with “6 or more employees.” The employer need not have any actual operations within the borders of Minneapolis (or even in Minnesota at all) – the only limitation is that the employer has 6 or more employee and at least one such employee “perform(s) work within the geographic boundaries of the City for at least 80 hours in a year…”
For example, a six-person house-cleaning business with customers in Minneapolis would be covered, as would a large out-of-state company with a telecommuting employee working out of their home in the City. Of course, the benefit would only apply to the actual employees who work within the Minneapolis city limits.
Benefit
The basics of the Ordinance are:
– Covered employees can earn one hour of paid sick leave for every 30 hours worked;
– Up to 48 hours can be accrued each year;
– Use of the paid leave may begin after 90 days on the job (presumably calendar days);
– Up to 80 hours can be carried over from year to year.
Employees using their paid sick leave must be paid “at the same hourly rate . . . as would have accrued during the time the accrued sick and safe time is used.” Fair enough, but what if the employee uses sick leave on a day in which they would have earned overtime, or when they would have received a premium for working a weekend or a holiday? Are they then entitled to more than merely their straight time rate?
How Leave May Be Used
Employees may use leave for: (1) an illness, injury, health condition, or preventative care; (2) care for a family member for the same reasons; (3) domestic violence or personal safety issues; (4) certain business closures by order of a public official; or (5) care for a child whose school or place of care has been closed by order of a public official.
Interestingly, the Ordinance allows employees to take sick leave in “the smallest amount of time tracked by the employer’s payroll system.” Thus, if your system tracks time in 15 minute increments or tenths of hours, employees must be permitted to use sick leave in these same tiny increments.
Recordkeeping and Notice
Employers will have to comply with notice and recordkeeping requirements:
– Employers must include a “notice of rights and remedies” under the Ordinance in their employee handbook;
– The Employer also must post a “notice of rights” poster in “any workplace or jobsite” where covered employees work. The notice must be in English and “all language spoken by more than 5% of the workforce.”
– Employers will have to track the number of hours worked in the City of Minneapolis for each employee. Because the Ordinance does not distinguish between exempt and non-exempt employees for purposes of recordkeeping, employers may actually have to track hours for exempt and non-exempt employees alike.
– These records will have to be maintained for a period of time after the employee stops working in Minneapolis since the benefit must be reinstated if the employee returns to work in the city.
Exemption
The Ordinance provides that employers already providing these benefits are exempt from its requirements. However, this may not be a great comfort to most employers since it seems that all obligations of the Ordinance must be present for the exemption to exist. Therefore, even if an employer already grants more sick leave than the Ordinance requires, the accrual and carryover provisions also would have to be observed.
Moreover, usage would have to be allowed for the other purposes of the law (e.g. domestic abuse, stalking, and school and business closures ordered by a public official), which most sick leave policies do not address. Employers will have to flyspeck their existing policies to insure that they match the Ordinance in every way.
Enforcement
The Ordinance will be administered and enforced by the Minneapolis Civil Rights Department (MCRD). “First violations” that occur between July 1, 2017 and July 1, 2018, will only be subject to mediation and warnings. After July 1, 2018, or earlier in the event of a second offense, employers in violation are subject to:
– Orders for reinstatement and back pay;
– The crediting of any sick leave that was not credited plus payment to the employee of the dollar value of the accrued sick and safe time accrued but not credited multiplied by two, or $250.00, whichever amount is greater;
– Payment of any sick time unlawfully withheld plus payment to the employee of the dollar amount of accrued sick and safe leave withheld multiplied by two, or $250.00, whichever amount is greater;
– Up to a $1,500 administrative penalty payable to the employee for each violation of the confidentiality or retaliation provision;
– An administrative fine payable to the city of up to $50.00 for each day that the employer violates the notice, posting, or recordkeeping requirements set forth in the Ordinance. Both the City and the employee are permitted to inspect the timekeeping records, and failing to keep the required records permits the City to presume that the employer is in violation.
Is the Ordinance Legally Valid?
Perhaps not. Previous Minnesota Cases have ruled that local entities may not regulate in areas that should be addressed on a state-wide basis. In one such case, the Minnesota Supreme Court struck down a local boat licensing requirement, calling it “unreasonable and absurd” to expect boat owners to register their boat with each and every municipality which has a lake or a portion of the lake within its boundaries.
By this same token, if other municipalities pass their own sick leave ordinances, employers throughout the state will face the daunting and arguably unreasonable task of monitoring and revising their sick leave policies on a city-by-city basis. A legal challenge to the Ordinance would therefore not be at all surprising.
Bottom Line
There is much we still do not know about this Ordinance so it is fortunate that it is not scheduled to go into effect until 2017, and perhaps not even then if a legal challenge ensues.
Still, time passes quickly and employers meeting the threshold of one employee working 80 hours a year in Minneapolis will have to revise their policies to comply.