On May 27, 2016, the Minneapolis City Council unanimously approved the Minneapolis Sick and Safe Time Ordinance, Title 2, Chapter 40 – Workplace Regulations.  The final Ordinance mandates unpaid sick and safe leave for employers with 1 to 5 employees, and paid sick and safe leave for employers with 6 or more employees. Notably, the final amendment includes not only the use for sick and safe care, but also school snow days.

Below is a quick overview of what the ordinance requires, who it applies to, what burdens employers have, and the implications of a violation. However, time will only tell how this plays out in reality.

What Does the Minneapolis Sick and Safe Time Ordinance Require?

The Ordinance, effective July 1, 2017, requires employers to provide employees with paid/unpaid sick and safe time.  New employers (with 1 or more employees), will have 12 months to provide unpaid time off. After 12 months, new employers will be subject to the Ordinance in its totality (this 12 month delay will only be allowed for 5 years from the enactment).

Employees working in Minneapolis will accrue sick and safe time unpaid leave at the rate of 1 hour for every 30 worked, up to an annual cap of 48 hours (either calendar or fiscal year). Exempt (salaried) employees are deemed to work 40 hours each week unless their normal workweek is less than 40 hours.  Employees must be allowed to use sick and safe time after 90 calendar days of employment.  Employers must permit an employee to carry over at least 80 hours of accrued but unused sick and safe time into the following year.

Additionally, sick and safe leave time need not be paid this time out at termination. Employees must be able to use the leave in the same increment of time consistent with current payroll practices and existing employer policies (but no more than 4 hours).  They must be compensated at the same hourly rate with the same benefits (except they are not entitled to lost tips or commissions and compensation is only required for the hours the employee was scheduled to work).

Who Is An “Employer” and “Employee” Under the Ordinance?

Does this Ordinance affect your business based in Eden Prairie or Alexandria?  It depends on whether you are a covered employer, defined below.  The Ordinance defines several terms with specificity, but here it is in a nutshell:

• An “Employer” is a person or private entity employing one (1) or more employees.
• An “Employee” is any individual employed by an Employer (including temps and part-time) that performs work for the Employer within Minneapolis for at least 80 hours in a year.  An Employee is not an independent contractor.
• “Family Members” are children (step, adopted, foster, adult); spouse; sibling; parent (step and in-laws); grandparents; grandchildren; guardian (ward, or member of household); and registered domestic partner.

Further, as with most wage and hour ordinances and laws, employees operating under a collective bargaining agreement may develop alternate means of meeting the goals of the Ordinance.

Construction Company Opt-Out

Construction companies may opt-out of this Ordinance if the employees are paid at least the Minnesota prevailing wage (Minn. Stat. 177.42) or the rates set forth in a registered apprenticeship agreement.  Such employers shall be deemed in compliance for those employees who receive either prevailing wage rate or the apprenticeship rate – regardless of whether the employees are working on a private or public project.

What If An Employer Already Offers Paid Time Off?

Not surprising, the Ordinance states that employers may certainly have more generous sick and safe time policies – but no lesser. Employers do not need to offer additional paid time off to employees if they already offer the same amount of PTO to employees that “can be used for the same purposes and under the same conditions.”  In other words, the PTO policy must meet these minimum standards of accrual, use, recordkeeping, notices, etc.

Further, the Ordinance does not prohibit employers from having policies allowing donation of this paid leave to other employees – so an employee may accrue the time but not “use” it, instead “donating” it to another (how this makes sense I have no idea – seems to me that this goes against the whole purpose of the ordinance for the benefit of that employee) .  Employers may also advance sick and safe leave to an employee prior to accrual.

What Can Accrued Sick and Safe Time Be Used For?

In short, after 90 calendar days of employment, an employee may use sick and safe time for:

• Mental or physical illness, injury, or health condition (theirs or family members).
• Medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition (theirs or family member).
• Preventative medical or heath care (theirs or family member).
• Absence due to domestic abuse, sexual assault, or stalking (so long as the absence is to seek related medical attention, victim services, counseling, relocation or legal action).
• Closure of the employer’s business by a public official due to public health emergency or an infectious or hazardous situation.
• Accommodation of need to care for child whose school or daycare has been closed by a public official due to public health or emergency situation.
• Accommodation for need to care for family member whose school or place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected closure.

A health care provider may only use sick and safe time when the provider has been scheduled to work (this does not include when the provider calls in and requests a shift within 24 hours or for on-call shifts – unless asked to remain on the premises during the on-call shifts).

What Can Employers Require of Employees?

An employer may require an employee to provide up to 7 days’ advance notice of foreseeable leave (such as doctor appointments) if the employee intends to use sick and safe time leave.  An employer may require an employee to provide notice of the need to use such leave “as soon as practicable” when it is unforeseeable (such as domestic violence).  Employers may also require “reasonable” documentation that the leave is covered for absences of 3 or more days.  Keep in mind that an employer may not require the employee to find a replacement worker to cover such hours (common in service and restaurant industries).  However, an employer may have a policy allowing the voluntary exchange of hours or trading shifts (hence, the employee would not need to use the paid time off).

Notices Required at Workplace, Employee Handbook & Upon Request

Employers must post the notice (the Department must publish it first) “in a conspicuous place at any workplace or job site where any employee works in English and “any language spoken by at least 5% of the employees at the workplace or job site” (so long as the Department has published that language’s notice).  Further, if you have an employee handbook – which I strongly advocate every employer should – the notice of employee rights and remedies under the Ordinance must be included in the handbook. Also, upon request, the employee must be provided their then-current hours of sick and safe leave he or she has accrued, and how much has been used.

Recordkeeping, Confidentiality & No Retaliation

Employers must keep records for 3 years (in addition to current calendar year) of each employee’s sick and safe time accrued and used “for each day of the work week”.  The employee may inspect the records at a reasonable time and place, and the Department may similarly have access to the records to monitor compliance.

Here’s where we’re going to see quite a few issues:

An employer with employees who occasionally perform work in the city must track hours worked in the city by each employee performing work in the city.”

I would not be surprised if the first lawsuit over an alleged violation is going to be over the definition of “work in the city” and “occasionally”. What about transportation and hauling companies bringing materials for contractors into the city?  Should hauling companies drive around the City of Minneapolis when possible to avoid this requirement? Is an employee “performing work in the city” if he or she is driving materials through Minneapolis without stopping?

Additionally, a unique provision requires that if an employee transfers out of Minneapolis by the same employer, and the employer doesn’t have sick and safe leave outside the city, the employer has to keep the employee’s accrued time on the books for 3 years.  If that employee returns to do work in the city within 3 years, the employee is entitled to all previously accrued time not used.  Further, if an employee is terminated but thereafter returns to the same employer within ninety (90) days, his or her sick and safe leave must be reinstated and the employee may use it at the commencement of reemployment (no 90 day wait).  In the case of mergers and acquisitions of businesses where the employees remain, the employees accrued time remains intact (no 90 day wait).

Not surprising, any health or medical information collected as a result of the employee’s use of sick and safe time must be treated as confidential.  As with any laws providing employee rights, retaliation for any employee actions under this Ordinance must be prohibited.

What Happens If An Employer Violates the Ordinance?

The Ordinance is effective July 1, 2017.  However, from July 1, 2017 to June 30, 2018, the Minneapolis Department of Civil Rights will only mediate disputes and issue corrective warnings to employers for the first violation.  Thereafter, the Director of the Department may investigate the alleged violation by serving a Notice of Investigation to the employer by U.S. mail, including a request for records or other information (an employer who does not respond with documentation cannot use any undisclosed records for an appeal).  A report of a suspected violation must be made after July 1, 2017 and within 365 days of the alleged violation.

If the Department decides not to investigate an alleged violation, it must notify the employee or other person who complained, and the employee has 21 days to file a request for reconsideration.  The Director of the Department must then respond to the employee within 10 days.

Assuming it does chose to investigate, next, the Department will consider the employer’s position statement and evidence relative to the allegation.  The Department may require a fact finding conference or “another process” in order to “define the issues, determine which elements are undisputed, resolve those issues that can be resolved and afford an opportunity to discuss or negotiate settlement.”  If the Minneapolis Department of Civil Rights determines that an employer violated the Ordinance (except when there is an agreed upon settlement), the Director must issue a written violation with findings of fact based upon the “preponderance of the evidence”.

If a violation is found, the Director may order the following relief (“including but not limited to”):

• Reinstatement and back pay.
• Crediting an employee’s accrued sick and safe time leave plus a penalty payment to the employee of the dollar value of that time x2 or $250, whichever is greater.
• Payment of accrued sick and safe time unlawfully withheld plus a penalty payment to the employee of the dollar value of that time x2 or $250, whichever is greater.
• Administrative penalty of up to $1,500 payable to the employee for each violation.
• Administrative fine of up to $50 for each day (or portion) a violation occurred that continued following written notice to the employer.
• Debarment – prohibiting licensees from contracting for city services (I find it interesting that this element was not in the ordinance itself, but was called out in the PowerPoint presentation made to the City Council – indeed it would fall under “including, but not limited to” language in the ordinance).

An employee, former employee or employer may appeal any violation of this Ordinance within 21 days from the determination. The appeal is considered by a hearing officer who will consider the record and may take additional testimony; reversal shall only be upon a finding that the decision was “clearly erroneous” (basically, something had to be really wrong in the first hearing).  Failure to appeal any decision constitutes an admission of the violation and is final following the 21 days without an appeal. A party must appeal to exhaust the administrative remedies prior to any lawsuit (otherwise, it becomes a complete defense to any petition or claim). Thereafter, the employee, former employee or employer may petition the Minnesota Court of Appeals to challenge the decision of the Department.

If an employer does not comply with the final decision (assuming no appeal was made), the City of Minneapolis may initiate a civil action in Court against the employer and, upon prevailing, “shall be entitled to such legal or equitable relief…including, without limitation, the payment of lost wages, interest, the payment of an additional sum as a civil penalty not to exceed the amount awarded for lost wages, and reinstatement in employment and/or injunctive relief and shall be awarded reasonable attorneys’ fees and costs.”  In other words, a small violation by an employer believing they are not liable – and holding firm – is going to add up very fast.  This is perhaps the biggest motivator for compliance.

What’s Next?

The Minneapolis Department of Civil Rights has to create the notice (in numerous languages) for employers – this should be available in the Fall/Winter/Spring of 2016-2017 according to the work group’s presentation.  It’s expected that the Department will adopt rules for this Ordinance, create guidelines and FAQs for employers and update this information on its website. Additionally, the city is exploring work-sharing agreements with the State of Minnesota.

This Ordinance is a first for a Minnesota city, but certainly not the last.  Expect similar ordinances to start spreading like wildfire (St. Paul and Duluth will likely be next), now that the city has done the work of creating the language, framework and enforcement mechanisms. Time will only tell, but I predict this is going to get messy – especially with non-Minneapolis based contractors who do minimum work in Minneapolis or haulers who drive through Minneapolis often (the drivers are, after all, working while driving).