Minnesota Paid Sick & Safe Leave Coming in 2024

Minnesota’s Earned Sick and Safe Time law (MN ESST), signed into law on May 24, 2023 by Minnesota Governor Tim Walz, goes into effect on January 1, 2024. MN ESST requires employers to provide paid sick and safe leave time for employees performing work for their employer within Minnesota for at least 80 hours in a year.

Covered Employers

Employers covered under MN ESST include all employers, regardless of location, employing at least one employee, including the state of Minnesota, a county, town, school district, or other governmental subdivision. For purposes of MN ESST, temporary employees of staffing agencies are treated as employees of the staffing unless a contractual agreement states otherwise.

Covered Employees

All employees, including temporary and part-time employees, who perform work for their employer within Minnesota for at least 80 hours in a year are covered under MN ESST.

Independent contractors and certain airline carrier employees designated as flight deck or cabin crew members are not covered employees under MN ESST.

Accrual of MN ESST

Employees will accrue MN ESST at the rate of one hour for every 30 hours worked, up to a maximum of 48 hours in a calendar year. Exempt employees are deemed to work 40 hours per week unless their regular workweek is less than 40 hours, in which case MN ESST accrues based on their normal workweek.

MN ESST time accrues in one-hour increments. Employees will begin accruing MN ESST time on January 1, 2024 or upon their date of hire, if later. Employees may use their MN ESST as soon as it is accrued.

MN ESST Permitted Uses

A covered employee can use accrued MN ESST for the following purposes:

1. An employee’s need to diagnose or treat a mental or physical illness, injury, health condition, or an employee’s need for preventive care;
2. An employee’s need to provide care for a family member^[1] for the same reasons as detailed in #1 above or the death of a family member.
3. An absence due to domestic abuse, sexual assault, or stalking of the employee or employee's family member, as long as the absence is to:
   • Seek medical attention or psychological or other counseling services related to physical or psychological injury or disability caused by domestic abuse, sexual assault, or stalking;
   • Obtain services from a victim services organization;
   • Obtain psychological or other counseling;
   • Seek relocation or take steps to secure an existing home due to domestic abuse, sexual assault, or stalking; or
   • Seek legal advice or take legal action, including preparing for or participating in any civil or criminal legal proceeding related to or resulting from domestic abuse, sexual assault, or stalking.
4. The closure of the employee’s place of business by a public official’s order, or the closure of a family member’s school or place of care due to weather or other public health emergency;
5. An employee's inability to work or telework because the employee is prohibited from working by the employer due to health concerns related to the potential transmission of a communicable illness related to a public emergency, or is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, a communicable disease related to a public emergency when the employee has been exposed to a communicable disease or the employer has requested a test or diagnosis;
6. When health authorities or a health care professional determines that the presence of the employee or family member in the community would jeopardize the health of others because of the exposure of the employee or family member to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease.

Employers may not require employees to search for or find replacement workers to cover for them while taking MN ESST time.

MN ESST may be used in the smallest increment of time tracked by the employer's payroll system, as long as such increment is not more than four hours.

Rate of Pay, Carryover & Frontloading Rules

A covered employer must pay the regular rate of pay to employees using MN ESST, but not less than the state or applicable local minimum wage.

Employers may permit employees to carry over accrued, unused MN ESST into the following year up to a maximum of 80 hours, unless an employer agrees to a higher amount.

Rather than complying with the MN ESST carryover rules, employers may also choose to frontload 48 hours of MN ESST time to employees at the beginning of the subject year as long as the employer pays employees for accrued, unused MN ESST at the end of the year. If an employer does not pay employees for unused MN ESST at the end of the year, then the employer is required to frontload 80 hours of MN ESST at the beginning of the subsequent year.

Employee Notice Requirements

Employers may require employees to provide notice of their need to take MN ESST seven days in advance when the need is foreseeable. If the need for MN ESST is not foreseeable, employers may require notice from employees as soon as practicable.

Employers requiring employees to provide notice of their need to use MN ESST must have a written policy containing reasonable notice procedures, and provide a written copy of such policy to employees. If a copy of the written policy has not been provided to an employee, an employer may not deny the use of MN ESST to the employee on that basis.

Employers may require an employee to provide reasonable documentation for absences of more than three consecutive days. Reasonable documentation includes the following:

• Sick time: a doctor’s note or an employee’s written statement, reflecting that the employee is using MN ESST for a qualifying sick time purpose.
• Safe time: a police report, a court order, a victims services organization statement, or an attorney statement reflecting that the employee is using MN ESST for a qualifying safe time purpose (without requiring the employee to disclose specific details).

Written statements by an employee may be written in the employee's first language and are not required to be notarized.

All MN ESST-related documentation received by an employer must be kept confidential and only disclosed with the employee’s permission, or when required under law or by a court/administrative agency. Medical records related to an employee’s use of MN ESST must be kept separate from employment/personnel files.

Termination of Employment & Rehires

Employers are not required to pay out accrued, unused MN ESST to employees upon termination of employment. If a terminated employee is rehired within 180 days by the same employer, then previously accrued, unused MN ESST time must be reinstated and available for use at the time of rehire.

Existing Leave Policies

Employers with existing paid leave policies and collective bargaining agreements^[2] that meet or exceed MN ESST requirements under the same terms and conditions are not required to provide additional paid time off.

Employers may permit employees to donate accrued, unused MN ESST time to another employee and also may advance MN ESST to an employee before being accrued.

Intersection of MN ESST with Local Paid Leave Ordinances

Although MN ESST is a statewide law, four different cities in Minnesota (Minneapolis, St. Paul, Duluth, and Bloomington) mandate paid sick and safe leave for employees. When MN ESST becomes effective on January 1, 2024, employers must comply with the most generous and protective law that applies to their employees, which might be the local ordinance rather than MN ESST.

Employers with employees working in these Minnesota cities should consult with their employment and labor counsel to determine which law will apply to their employees.

Other Employer Requirements

Poster and Employee Notice: Employers will be required to post a MN ESST workplace poster, detailing employee rights and protections, in a conspicuous and easily accessible worksite location, or electronically. A model workplace poster is anticipated to be posted by the Minnesota Department of Labor and Industry (MN DLI) before January 1, 2024 in the five most common languages spoken in Minnesota as well as other languages upon employer request.

Employers must also provide employees with a notice by Jan. 1, 2024 — or at the start of employment, whichever is later — in English and in an employee’s primary non-English language, informing them about their rights and protections under MN ESST. Additionally, if an employee has an employee handbook, they must include this MN ESST notice in the employee handbook.

Paycheck: Employers must report accurate accrual and usage of MN ESST each pay period by including this information on employees’ paychecks.

Recordkeeping: Employers are required to maintain MN ESST records documenting hours worked and MN ESST used for at least three years. Employers must permit employees to inspect their MN ESST records at a reasonable time and place.

Maintenance of Heath Benefits: Employers must continue to maintain health benefits for employees using MN ESST and employees will continue to pay for their health benefits at the employee-cost share amount while taking MN ESST.

Enforcement

The MN DLI Commissioner is responsible for administration and enforcement of MN ESST. The Commissioner will conduct investigations and impose administrative penalties against employers for violations along with other damages payable to the affected employees, including back pay, gratuities, and compensatory damages. Repeat or willful violations of MN ESST may be subject to a civil penalty of up to $10,000 for each violation per employee.

In addition to administrative penalties imposed by the MN DLI Commissioner, employees and other individuals may bring a civil action against employers within three years of the alleged MN ESST violation.

Employers are prohibited from retaliating or taking any adverse action against employees for requesting or using their MN ESST, including maintaining an absence control policy or attendance point system that counts MN ESST as an absence that may lead to or result in retaliation or any other adverse action.

Further, employers are prohibited from reporting or threatening to report the actual or suspected citizenship or immigration status of an employee (or their family member) to a federal, state, or local agency for requesting or using their MN ESST.

Next Steps for Employers

As the January 1, 2024 effective date for MN ESST compliance approaches, covered employers with employees working in Minnesota are advised to:

1. Consult with their employment and labor law counsel to create new or update existing paid sick and safe leave policies and employee handbooks to comply with the MN ESST requirements.
2. Update their payroll systems to ensure that the required MN ESST information is properly reflected in covered employees’ paychecks.
3. Monitor the MN DLI’s webpage for additional guidance and resources including FAQs, model employee notice, and model workplace poster, all anticipated to be published before January 1, 2024.

As the paid leave landscape around the country continues to rapidly change and evolve, Risk Strategies is committed to keeping employers informed and updated.

Contact us directly at benefits@risk-strategies.com.

[1] A family member is defined under MN ESST expansively, including, but not limited to, an employee’s child, spouse or registered domestic partner; sibling, parent, grandchild, grandparent, niece/nephew; aunt/uncle. Additionally, this family member definition includes any other individual related by blood or whose close association with the employee is the equivalent of a family relationship and up to one individual annually designated by the employee.

[2] With the exception of a collective bargaining agreement with a bona fide building and construction trades labor organization that may, under certain circumstances, waive MN ESST requirements.