As 2018 comes to a close, it is a great time for employers to address lingering issues that have been on the back burner and start “fresh” in the new year. A new year is a great time to roll out changes for both administration purposes and for employees; new year, new policies. Here are some items you may want to consider auditing internally and bringing up to current if need be for a January 1, 2019 revision date:

  • Wage disparities (male/female/minority)
  • Job classification (exempt, non-exempt, independent contractor)
  • Job descriptions (should reflect what the employee actually does – jobs morph over time)
  • Incentive compensation / bonus plans (the far majority I review need significant modification as they are written by sales folks and not HR/legal and thus leave out at-will language, deductions, prepayments, “earned” versus “accrued” and payout terms with absences, discipline, termination, etc.)
  • Minimum wage increases (State, Minneapolis, St. Paul)
  • Safe and Sick Leave Act ordinances (Minneapolis, St. Paul, Duluth)
  • Changing paid time off methods / calculations (from up front to accrual, etc. – and in compliance with any applicable ordinance)
  • Overtime (calculated weekly, all hours paid, no flex time between workweeks) – also, the new federal overtime rule is expected to be published in March 2019 – stay tuned on that (I would only be guessing as to how the DOL is going to roll it out).
  • Recordkeeping (best practices being followed; exempt/salaried employees can be made to record their time – which is very good to have if their classification is challenged in the future)
  • Wage deduction / loans / tuition reimbursement policies

With Thanksgiving tomorrow and Christmas right around the corner, employees start to question holiday time off and pay (or lack thereof). In Minnesota, there is no requirement that employers provide certain days off, with or without pay. Accordingly, employers just need to follow their policy (best practices – have it written), whatever it is. If employees must work on a holiday, employers must pay them for that time worked, but may also chose to pay an additional half-time or double time and/or additional PTO to be taken another day. Those hours worked count towards overtime. In addition, the additional pay will change the regular rate for overtime purposes and thus, the hourly overtime rate will increase. For employers who provide time off without pay, or time off with pay, those hours are not “hours worked” and thus, do not count towards overtime. Key here is that your policy is written in a way that allows you flexibility as business needs arise. If your policy is not always followed, it is time to dust it off and revise it to be consistent with actual business practices.

According to Donate Life America, every 10 minutes another person is added to the waiting list for an organ. Twenty-two (22) people die each day waiting, and yet one organ/eye/tissue donor can save and heal more than 75 lives. According to the United Network for Organ Sharing, 114,370 people are currently waiting for a lifesaving transplant; in Minnesota, there are 3,155 people waiting (62 under the age or 18). While many may “check the box” when obtaining/renewing a drivers’ license, few think about making a living donation (approximately 6,000 per year). In Minnesota, we are fortunate to have the Gift of Life Transplant House, a place for immune-suppressed transplant patients (only) and their caregivers to stay while receiving medical treatment in Rochester. The Gift of Life Transplant House was founded in 1973 by Edward Pompeian, who then received a donated kidney, the “gift of life”, from his mother.

For those like Mr. Pompeian’s mother that decide to make a living organ donation, the U.S. Department of Labor (DOL) has made it a little less burdensome to donate life to another. On August 28, 2018, the DOL opined in FMLA2018-2-A, that organ donation surgery is a “serious health condition” under the Family Medical Leave Act (FMLA), so long as the individual requires overnight hospitalization (as it commonly requires) and/or post-surgery recovery. Again, the employer must be subject to the FMLA, the employee must be FMLA eligible, and the employee must present acceptable medical certification supporting the need for leave.

The U.S. Department of Labor’s August 28, 2018 Opinion Letter FMLA2018-1-A confirms that, in certain circumstances, an employer may “freeze” an employee’s attendance points during periods of Family Medical Leave Act (FMLA) leave. Attendance points are often used in a manufacturing or other settings when attendance is critical and HR needs a simple way to monitor and decide when to write up/terminate an employee. In this instance, the employer has a no-fault attendance policy whereby employees accrue attendance points over the course of 12 months “active service”, until a certain amount is hit (18 points), at which point they are automatically terminated.

Key here, is that employees do not accrue points for certain absences such as FMLA-protected, workers’ compensation, vacation, or other specified/approved leaves. However, the points collect over 12 months of “active service”, thereby freezing the points when the employee is on an approved leave. When the employee returns, their points pick up where they left off (thus, the points may be on their record for more than 12 months).

The DOL opines that such a method is acceptable under the FMLA, as the person is in no better or worse position because of taking FMLA. However, the DOL does caution that such practice is okay, so long as, “employees on equivalent types of leave receive the same treatment”. In other words, employers do need to be careful to ensure that all types of leave are treated the same and freeze the points for all approved absences (such as workers’ compensation, vacation, etc.), and may want to consider, for administrative purposes, a minimum time such as two weeks before absences freeze points.

 

On August 28, 2018, the U.S. Department of Labor (DOL) issued 6 new opinion letters, 2 related to the FMLA which has not occurred since 2009. While I’ll write about them separately, this is exciting news! The letters provide employers with compliance assistance related to the administration of the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA). As I tell employers all the time, while their situation may be unique to them, you’d be surprised how frequently we address the same facts/issues (granted, the actual facts are not identical, but you get my drift) and thus we’re able to take our knowledge of how past situations worked out, and use them to handle the current situation. Similarly, the DOL’s opinion letters provide employers with guidance based on similar issues/facts and can be a great tool for employers when handling certain situations.

  1. Compensabilty of voluntarily attending benefit fairs and wellness activities (FLSA2018-20)
  2. Commissioned sales employee overtime exemption related to internet sales (FLSA2018-21)
  3. Volunteer status of nonprofit members when acting as credentialing examination graders (FLSA2018-22)
  4. Movie theater overtime exemption when dining services offered (FLSA2018-23)
  5. “No-fault” attendance policies and roll-off of attendance points related to FMLA (FMLA2018-1-A)
  6. Organ donors’ eligibility for FMLA (FMLA2018-2-A)

Check out my subsequent blogs for more information about the above.

We are less than a month away from the 1-year anniversary of when the Minneapolis and Saint Paul sick and safe time ordinances went into effect. Both cities have recently released a tracking spreadsheet available to employers to compute and track accrual and use of sick and safe time hours. Minneapolis employers can use this link and St. Paul employers can use this link to access the spreadsheets.  Minneapolis also updated their notice poster to include the minimum wage increase schedule. Employers should make sure to update their handbooks and workplace posters with the current version (found here).

For those of you keeping track of the Minneapolis ordinance, as I discussed most recently here, the Minneapolis ordinance has been the center of a legal dispute between business groups and the City of Minneapolis. However, we may finally have a resolution to the question I am most frequently asked, whether an employer must comply with the ordinance if they are not located in Minneapolis, or if they are located in Minneapolis, but do not have employees who work in Minneapolis. On May 9, 2018, the Minnesota District Court held that state law does not preempt the ordinance, but the amended ordinance still exceeds Minneapolis’ territorial authority due to the record keeping and administrative obligations placed on employers.

As a result of the court decision, businesses located outside of the geographic bounds of Minneapolis do not need to comply with the ordinance. If you are unsure of whether your company is located within the geographic bounds check the city ward map found at here.

As expected, on May 29, 2018, the Duluth City Council voted to pass the Earned Sick and Safe Time Ordinance (“Ordinance”). The Ordinance currently mandates that employers (wherever located), with 5 or more employees, provide paid sick and safe leave to employees starting January 1, 2020. That being said, given the recent ruling on the Minneapolis Ordinance, I would not be surprised if Duluth’s Ordinance is challenged as well, and eventually limited to employers with a business in Duluth.

What Does the Duluth Earned Sick and Safe Time Ordinance Require?

Effective January 1, 2020 employers are required to provide employees with 1 hour of earned sick and safe time for every 50 hours worked, up to 64 hours per year. However, the Ordinance only allows employees to use up to 40 hours of accrued but unused sick and safe time each year. Alternatively, employers can comply with the Ordinance by front-loading at least 40 hours of earned sick and safe time following the initial 90 days of employment each year and again at the beginning of each subsequent year.

Accrual begins at the commencement of employment, or for current employees, January 1, 2020. If an employee has unused accrued sick and safe time at the end of the year, the employee may carry over 40 hours of accrued but unused sick and safe time into the next year. Employers are not required to payout the accrued but unused sick and safe time hours upon termination or other separation from employment (make sure your handbook is clear especially if you have different types of time off such as vacation, sick, etc.).

Employers must compensate employees at their standard hourly rate, or an equivalent rate for salaried employees. The Ordinance does not require compensation for lost tips or commissions.

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

All individuals, corporations, partnerships, associations, nonprofit organizations with 5 or more Employees (as defined below), are considered an “employer” under the Ordinance. The number of employees is calculated based on the average number of employees per week in the previous year. Temporary employees from a staffing agency are considered an employee of the staffing agency under the Ordinance. Notably, in an attempt to avoid challenges to the Ordinance similar to the ones that arose surrounding the Minneapolis Sick and Safe Time Ordinance, the Duluth Ordinance defines an “employee” as:

  1. A person working within the geographic boundaries of Duluth for more than 50% of the employee’s working time in a 12-month period, or
  2. “is based in the city of Duluth and spends a substantial part of his or her time working in the city and does not spend more than 50 percent of their work-time in a 12-month period in any other particular place.”

The Ordinance does not cover independent contractors, student interns, or seasonal employees.

Construction Company Opt-Out

Similar to the Minneapolis Ordinance, construction companies may opt to satisfy the requirements of the Ordinance by paying at least the prevailing wage rate (Minn. Stat. 177.42), or the rates set for in a registered apprenticeship agreement.

What If An Employer Already Offers Paid Time Off?

Continue Reading Duluth Passes Sick & Safe Time Ordinance

On Wednesday, May 9, 2018, the Minnesota District Court (Hennepin County) upheld the status quo (remember the temporary injunction I wrote about earlier), finally determining that state law does not preempt the Minneapolis Sick & Safe Leave Ordinance, but the Ordinance cannot be enforced by Minneapolis outside the geographic boundaries of the City of Minneapolis.

In March 2018, in response to the temporary injunction, Minneapolis amended the Ordinance as follows to narrow its geographic reach: “employees accrue a minimum of one (1) hour of sick and safe time for every thirty (30) hours worked within the geographic boundaries of the city up to a maximum of forty-eight (48) hours in a calendar year…” Further, “an employer is only required to allow an employee to use sick and safe time that is accrued pursuant to this ordinance when the employee is scheduled to perform work within the geographic boundaries of the city…” The Court, however, decided that the revisions still exceed the City’s territorial authority.  As a result, the Ordinance only applies to employers located within the geographic bounds of Minneapolis. The City may appeal this decision to the Minnesota Court of Appeals, so until that deadline is over, we won’t know if this is a done deal (but it is the law for now).

Keep in mind, employers located within the city of Minneapolis must still comply with the Ordinance.  If you are a Minneapolis-based employer and haven’t done so already, be sure to check your handbook and paid time off policy to be sure it is compliant with the Ordinance’s accrual rates, carry-over rules, and employee notice requirements. Additionally, as I blogged about earlier, Duluth employers should be aware that Duluth may only be a month away from enacting its own Earned Sick and Safe Time Ordinance, which is expected to pass.

Duluth is one step closer to passing its own Earned Sick & Safe Time ordinance (ESST), to go into effect January 1, 2020. Following in the footsteps of Minneapolis and St. Paul, Duluth’s proposed ordinance would require employers to provide employees with 1 hour of time off for every 50 hours worked. Employees would also be able to bank up to 40 hours of earned sick time from one year to another.

For purposes of Duluth’s ESST, an “employee” is defined as a person working within the geographic boundaries of Duluth for more than 50% of the employee’s working time in a 12-month period, or is based in Duluth and spends a “substantial part” of work time in Duluth and not more than 50% of work time in a 12 month period in any other place. Notably, seasonal workers (those employed 120 days or less) would be exempt as would independent contractors, student interns, and those covered under the federal Railway Unemployment Insurance Act. An “employer” under the ESST is defined as having 5 or more employees in any location, whether or not they work in Duluth. A temporary employee supplied by a staffing company is considered an employee of the staffing company. The definition of “employer”, however seems problematic in light of the recent Court order regarding the Minneapolis Sick & Safe Leave Ordinance (more on that in my next blog), as it appears to govern non-Duluth based employers. Thus, I suspect a lawsuit will follow challenging the scope of the ordinance, if enacted as amended.

The original ordinance and amendments can be found here. The City Counsel meets again May 29, 2018, and is expected to vote on it, as amended. Stay tuned for a detailed blog should it pass.

On April 12, 2018, the U.S. DOL issued Opinion Letter FLSA2018-19 regarding the compensability of frequent breaks. As the DOL notes, most employers provide employees a 20 minute (or less) paid break in the morning, a 30 minute (or more) unpaid lunch break, and 20 minute paid afternoon break. In this case, several employees had a serious medical condition under the Family Medical Leave Act (FMLA) that required a 15 minute break every hour.  Accordingly, out of an 8 hour day, the employees were only working 6 hours. The question posed by the employer was whether that time needed to be paid since it was less than 20 minutes (and the Supreme Court has held that rest breaks up to 20 minute are ordinarily compensable as they are for the benefit of the employer).

The DOL opined that an employee who uses intermittent FMLA for additional breaks need not be paid for that time outside of the normal 20 minute break provided to all employees (i.e. the morning and afternoon break).  The DOL concluded that neither the Fair Labor Standards Act (FLSA) nor the FMLA requires that the breaks be paid, except that “employees who take FMLA-protected breaks must receive as many compensable rest breaks as their coworkers receive”. This opinion letter is a great reminder to employers of the interplay between the FMLA and FLSA (and often ADA).