Minneapolis and St. Paul Sick and Safe Leave Frequently Asked Questions

By Caitlin M. Anderson - Seaton Peters & Revnew

July 17, 2017

On July 1, 2017, both the Minneapolis and the St. Paul sick and safe time ordinances went into effect. Currently, both Ordinances only affect employers and employees who work within the city boundaries. However, as currently written, the Minneapolis ordinance has the potential to include employers located outside of Minneapolis who have employees working in Minneapolis. On January 19, 2017, a district court judge issued a partial temporary injunction that resulted in the ordinance only being applied to employers located in Minneapolis. The decision was appealed, and oral arguments were heard on July 11, 2017. Within the next ninety days, the Minnesota Court of Appeals will issue their decision. The decision will most likely be appealed to the Minnesota Supreme Court.

Although the two ordinances do not currently affect employers outside of the cities’ boundaries, all employers should be aware of the popularity of paid sick leave requirements. In Minnesota, Duluth is expected to join Minneapolis and St. Paul in passing a sick and safe time ordinance sometime this year. If passed, Duluth will join the more than twenty cities and seven states to have passed sick and safe time legislation.

The following are commonly asked questions regarding the Minneapolis and St. Paul paid sick leave requirements.
 
Q:  How do you calculate an employee’s rate of pay for the use of sick and safe time when the employee works two different jobs/shifts for the same employer, and each job/shift has a different pay rate? 

Minneapolis: The rate of pay for the employee’s use of sick and safe time is the rate of pay for each job/shift the employee would have worked. To calculate the total rate of pay, first determine whether the length of the job/shift is fixed or indeterminate. Then, follow the appropriate calculation below: 
 
Length of job/shift is fixed:

- Multiply the length of each job/shift by the rate of pay for each job/shift.

Length of job/shift is indeterminate:

- Step 1: Calculate hours worked for each job/shift by viewing “similarly situated employees who worked the same (or similar) shifts [or jobs] in the past or calculate an average or typical length of shift based on the employee’s work history.”

- Step 2: Multiply the numbers calculated in step 1 by the rate of pay for the corresponding job/shift.

St. Paul: St. Paul recommends calculating a shift of indeterminate length by looking at the hours worked by the replacement worker, or an employee who worked the same or similar shift.

Q: Are employees who telecommute to work covered under the ordinance?

Minneapolis: While the city of Minneapolis has not directly answered this question, it is reasonable to interpret the Minneapolis ordinance similarly to the St. Paul ordinance (see below).

St. Paul: Employees who telecommute or work from home for a company with a physical location in St. Paul accrue sick and safe time hours as long as they work at least eighty hours in a year from a home located in St. Paul.
           
Q: Does an employee accrue sick and safe time hours when they drive through the city?
 
Minneapolis: Employees who meet the eighty–hour requirement accrue sick and safe time hours for travel and stops in Minneapolis that is considered working time. Employees who only drive thorough the city are not covered under the Ordinance.
 
St. Paul: Employees who drive through and make only incidental stops are not covered by the ordinance. However, if an employee has to travel and make stops as part of their job in St. Paul, and the employer maintains a physical location in St. Paul, the employee accrues sick and safe time for the hours worked in St. Paul.
 
Under both the Minneapolis and St. Paul ordinances, employees do not accrue sick and safe time hours for time spent traveling to and from work before a shift has started or after a shift has ended. However, employees may accrue sick and safe time hours for time spent traveling as part of the employee’s principal job duties, such as traveling from jobsite to jobsite. Additionally, once the employee engages in any activity on behalf of the employer, the employee may accrue sick and safe time hours for any subsequent travel time.
 
Q: Do new employers have to comply with the Ordinance?
 
Minneapolis: Yes. However, until July 1, 2022, an employer in its first twelve months of operation may provide unpaid sick and safe leave.
 
St. Paul: Yes. However, until January 1, 2023, an employer in its first six months may provide unpaid leave. The six months grace period begins on the hire date of the first employee.
 
Q: After the sale of a business, do the employees who remain under the successor employer lose their accrued but unused sick and safe time hours earned before the sale of the business?
           
No. Under both ordinances, employees who remain with the new employer retain their accrued and unused sick and safe time hours earned under the original employer.
 
Q: What records must employers keep?
 
 Employers may choose their own record–keeping system as long as they record and keep for a period of three years: (1) the number of hours worked within the city boundaries for non–exempt employees, (2) hours of sick and safe time leave available, and (3) hours of sick and safe time leave used.

Q: Does a business owner who counts himself or herself as an employee on his or her W-2 have to record and accrue sick and safe time?
 
Yes, the business owner must follow the same record keeping and accrual requirements required under the ordinances of both Minneapolis and St. Paul.
 
Q: Must an employer pay out accrued but unused sick and safe time hours upon separation?
 
Under both ordinances, employers are not required to pay out accrued but unused sick and safe time hours upon termination, resignation, retirement, or other separation.
 
Q: May an employer require notice from the employee before he or she uses sick and safe time?
 
Minneapolis: An employer’s customary expectations for communication regarding absences should still be followed as long as it does not interfere with the purposes of the leave. For foreseeable absences, employers may require the employee to provide notice in advance. However, the notice may not be required more than seven days in advance. For unforeseeable absences, an employer may require notice as soon as practicable.
 
St. Paul: The St. Paul ordinance is substantially similar to the Minneapolis ordinance’s requirements (see above), with the exception that St. Paul does not place a cap on when employers may require notice. Therefore, under the St. Paul ordinance, employers may require notice more than seven days in advance as long as it does not interfere with the purposes of the leave.
 
Q: May an employer require documentation showing an absence was used for an appropriate purpose?

Employers may require reasonable documentation for absences greater than three consecutive days. Examples of reasonable documentation include, but are not limited to, a note from a health care provider, medical record, or other documentation that indicates the employee sought and received medical treatment. 
 
Practical Tips:

Employers should determine whether their company is located within the boundaries of Minneapolis or St. Paul. Additionally, employers should review and revise their existing policies to make sure the policies comply with the new ordinances. Specifically, employers should check to make sure, among other things, current PTO accrual rates meet or exceed the requirements set out in the Minneapolis or St. Paul ordinance. For example, employers whose current plan allows employees to accrue one hour of paid sick leave for every forty hours worked would not be in compliance with either ordinance, because both ordinances set a minimum accrual rate of one hour of paid sick leave for every thirty hours worked. While many current PTO policies are substantially compliant with the ordinances’ requirements, changes may need to be made to include or modify terms such as carryover, time–off requests, and documentation requirements.
 
Minneapolis Passes $15.00 Minimum Wage
 
On Friday June 30, 2017, the Minneapolis City Council approved, by a vote of 11-1, a $15 minimum wage ordinance. Currently, Minneapolis follows the Minnesota minimum wage of $9.50 an hour, which starting in 2018 will be adjusted for inflation each year. As written, the ordinance appears to apply to employers located in the boundaries of Minneapolis and to employers outside Minneapolis who have employees who work two or more hours, in a particular week, in Minneapolis. Under the Ordinance, employers must pay all employees the minimum wage for all time worked within the city limits.
 
The effective dates of the ordinance vary depending on a business’s size. The ordinance will affect large businesses (more than 100 employees) beginning January 1, 2018, and small business (100 or fewer employees) beginning July 1, 2018. A company’s business size is determined by counting all employees (e.g. full–time, part–time, temporary) that perform work for the company for pay, including employees who work outside of Minneapolis. The definition of “employee” does not include independent contractors.
 
Under the Ordinance, large businesses have a five–year phase–in period, while small businesses have a seven–year phase–in period. Thus, under the ordinance, large businesses will be required to pay $15 an hour by July 1, 2022 and small business will be required to pay $15.00 an hour, two years later, on July 1, 2024.
 
Beginning in 2022, the city will announce adjusted wage rates, based on inflation, which will apply on January 1 of each subsequent year. Starting July 1, 2024, small business will be subjected to an inflation adjusted minimum wage rate as well. 

Practical Tips:
 
Employers located in Minneapolis, employer with employees who work in Minneapolis, should stay up to date with any minimum wage regulations the city releases. In addition, employers should calendar the dates the minimum wage increases over the next several years.