Big or small–every company doing business in Minneapolis needs to understand the coming sick time ordinance. The proposed ordinance is the product of the recommendations from the Workplace Regulations Group (a public-private appointed group). There is a single public hearing on the proposed ordinance on May 18th with the vote set for May 27th. This ordinance in its current form will impact businesses of all sizes. Here is what companies need to know about the proposed ordinance as they start prepare:

 

1. Casting a Wide Net

 

The proposed Minneapolis ordinance sets the stage for a large scope of coverage-regardless of whether the employer or employee is a resident of (or even routinely working in) Minneapolis. Breaking down the key definitions:

 

  • Employer. Any organization (other than government agencies) that employs at least 6 employees. This means that everyone else is pretty much treated as an employer and needs to comply (i.e. non-profits, start-ups, law firms, retailers, banks, etc). Note that this definition doesn’t define the term “employer” based on company location. This means that every organization with qualifying employees needs to comply regardless of the location of their operations.
  • Employee. Any individual employed by an employer including temps or part-time individuals who work at least 80 HOURS in the City of Minneapolis. Again, it does not matter where the individual works the rest of the year.

 

2. Limited Exceptions

 

There are only a few exceptions to coverage in the current version of the proposed ordinance which include:

 

  • Casual Employees. Meaning someone that works at uncertain or irregular times or otherwise fills in when a regular employee cannot. Employers can require a minimum of shifts (only 2) in order to remain a “casual employee.”
  • Independent Contractors. Individuals who receive a 1099 and not a W2 statement.
  • Construction Workers. Defined by Minn. Stat. 179.254 and receive a prevailing wage rate.
  • Construction worker apprentices. Must be registered with DOL and paid the required statutory rate.
  • Health care providers who are casual employees. Nurses, CNA, doctors, etc. that fall under the casual employee definition.

 

3. Benefit

 

The nuts and bolts of the benefit required by every employer to each qualifying employee is:

 

  • Accrual. 1 hour of sick time accrued for every 30 hours worked with a maximum of 48 hours (roughly 1.25 weeks) accrued in each year unless more is permitted by the employer.
  • Rollover. Employees are able to carry over up to 80 hours (roughly 2 weeks) at any time and can carry over yearly.
  • Eligibility. Accrual begins on Day 1 of employment. Employee can begin using the benefit 90 calendar days from employment start unless permitted earlier by the employer.

 

4. Hidden Costs

 

Employers subject to the ordinance will be required to do the following when the ordinance becomes effective:

 

  • Posting. All employers must post in any workplace or job site the notices prepared by the city. These notices will be prepared in all languages spoken by more than 5% of the workforce in Minneapolis.
  • Handbooks. Employers must update their employee handbooks to provide notice of rights and remedies under the ordinance.
  • Pay stubs. Employers must provide a written notice to every employee of the current balance of accrued sick time and used sick time with every payroll.
  • Job Location Tracking. Employers need to maintain records of time spent in Minneapolis for those employees who “occasionally perform work” there.
  • Open records. Employees have the right to inspect records upon request.
  • Presumption of violation. Failure to meet all of these records standards means that the employer is presumed to be in violation of the ordinance “absent clear and convincing evidence.”

 

5. Enforcement and Remedies

 

Ordinance has a complaint based system. Basically, anyone (employee or not) can allege a violation by an employer to the City as long as the event happened in the last year. This complaint triggers:

 

  • Investigation process. Written inquiry from the city to the employer. Employer has to respond in full with records in time allotted. Failure to do so establishes a rebuttable presumption of a violation and prohibits their ability to use the records in the administrative process.
  • Determination of violation. City will issue a finding of violation to the employer and there is a right to appeal. Failure to appeal the determination prevents other remedies of the employer.
  • Damages. Employer found to be in violation will be subject to: reinstating the employee; paying back pay; crediting for sick time that was (or should have been) accrued; paying a $1500 administrative penalty TO THE EMPLOYEE FOR EACH VIOLATION; and an administrative fine to the city of $50/day FOR EACH DAY THE VIOLATION OCCURRED.
  • Civil Action. The city attorney can also initiate suit against employers not promptly complying with the right to recover damages including reasonable attorneys fees when prevailing.

 

The goals of the ordinance are noble. But, the bottom line is that this ordinance requires a lot more than paid sick time for EVERY business that operates in Minneapolis. There are new records to be maintained, amendments to current policies, providing notices, and notices to employees. Best to be prepared because chances are that the implementation of this ordinance will be expensive for companies of all sizes–legally and administratively.