Minnesota recently enacted a statewide paid sick and safe time leave law that will become effective on January 1, 2024.

Four Minnesota cities—Minneapolis, St. Paul, Duluth, and Bloomington (one of the largest metropolitan-area suburbs)—already had such laws in effect since as early as 2017. Most of these ordinances are similar in their key provisions for the accrual and use of earned sick and safe time (ESST). The state statute, however, affords employers an important new option that is unavailable under three of the local ordinances, and it may be useful for some employers.

Quick Hits

• Minnesota’s new earned sick and safe time (ESST) law will allow employers to frontload forty-eight hours of ESST in the first year of employment and pay out in cash the value of unused hours at the end of the year and not carry over unused hours into the next year.
• The state law takes effect on January 1, 2024.

The Minneapolis, St. Paul, Duluth, and Bloomington ordinances provide for an alternative to the accrual basis for ESST hours known as the “frontloading method.” This method requires an up-front allotment of forty-eight hours (forty hours for Duluth) of ESST hours during the first year of an employee’s employment and eighty hours (forty hours in Duluth) in each subsequent year (the calendar or fiscal year designated by the employer). An employer may avoid the administrative burden of tracking earned and used ESST hours by using the frontloading method. An employer also may designate vacation, paid time off (PTO), or sick leave that it already provides as the source of ESST hours, as long as employees may use such leave for all permissible purposes as set forth in the ordinances.

The new state law provides an alternative procedure that allows an employer to provide forty-eight hours of ESST in the first year of employment, pay out in cash the value of unused hours at the end of the designated year, and not carry over any unused hours into the next year.

Under this new option in the Minnesota statute, an employer may limit the total number of hours of ESST available to employees to forty-eight in a year (as long as any unused hours are paid out at the end of the year). Except in this situation, the statute does not change the rule that unused ESST hours need not be paid out upon termination of employment or otherwise. The City of Bloomington recently amended its ordinance to adopt the same procedure.

Local ordinances were not preempted by the new statute, which provides that an employer must follow the most protective provisions of the statute or local ordinances. In that regard, there is a bit of a contradiction and it is difficult to predict which law will be deemed “most protective” in this situation if the statute and local ordinances differ, as is the case in Minneapolis, St. Paul, and possibly Duluth. The preambles of the ordinances cite the need for adequate time to attend to personal or family medical or other health issues and domestic abuse. But the statute clearly allows employers to cap ESST hours in a year, if unused hours are paid to the employee. Thus, the key distinction is whether more leave, or monetary benefits, are more protective for employees. For employers outside of Minneapolis, St. Paul, or Duluth, or that do not have employees working in those cities, the statute may be a solution for managing employee leaves of absence for ESST.