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On May 26, 2016 the City of Minneapolis adopted its unique version of a mandatory paid sick time ordinance calling it the Minneapolis Sick and Safe Time Ordinance. As written, the ordinance is sweeping. “Employer” is defined as broadly as possible to include any person or entity employing one or more employees.  “Employee” is defined equally as broadly to include anyone employed by an employer working at least 80 hours per year within the “geographic boundaries of the City” (i.e. physically located).  In very general terms, the ordinance grants an eligible employee one hour of paid time off for every 30 hours worked up to a maximum of 48 hours per year.  The ordinance does not apply to independent contractors.  Importantly, the ordinance also contains a nagging bookkeeping requirement for employers with employees who “occasionally perform work in the city.”  This section requires employers to track hours “worked in the city by each employee performing work in the city.”  The ordinance’s looming effective date is July 1, 2017.

However, in the past 13 months the ordinance has been the subject of both court and legislative challenges. Thus far, those challenges received only very limited success.

Last fall a coalition of businesses and business associations, led by the Minneapolis Chamber of Commerce, sued the City of Minneapolis in Hennepin County District Court to block the ordinance from moving forward on several grounds. On January 19, 2017 the Chamber group received only a small part of the relief it requested.  The court halted implementation of the ordinance only against employers “resident outside the geographic boundaries of the” city of Minneapolis. The court left the rest of the ordinance intact.  Both sides appealed the case to the Minnesota Court of Appeals with oral arguments set for July 11, 2017.  A decision is likely by early this fall.

In the Minnesota Legislature, both the House and Senate passed bills which would have blocked enforcement of the Minneapolis and similar municipal ordinances in favor of uniform, but yet to be adopted, state labor regulations. Governor Dayton, however, vetoed the final combined bill (which was just one part of a much larger bill).  This left many employers waiting for a decision on the court challenge or another legislative challenge next year.

Without an answer from the courts and legislature, uncertainty remains. What is certain is that the ordinance could be very costly.  That said, employers should know the ordinance and be prepared.  Here is a short analysis of whether, and what parts, of the ordinance apply to an employer who operate in or around the city of Minneapolis.

  1. No employees. If the employer has no employees, the ordinance does not apply. For example, the employer is a one person business. Or, the employer solely contracts with independent contractors.
  2. No employees ever work in the city. If the employer has employees but none ever work within the geographic boundaries of the city, the ordinance does not apply. For example, the employer has no employees who perform any work in the city, no matter how short the duration.
  3. Employees occasionally work in the city. If the employer has employees who occasionally perform work in the city, the employer must “track hours worked in the city by each employee performing work in the city.” This could be an onerous bookkeeping task. For the transportation industry, the City’s rules implementing the ordinance specifically apply it to an employee who just “travels through” the city, even without making any stops to pick-up or drop off freight. However, an employer located outside the city does not have this obligation as long as the court injunction stands.
  4. Employees work regularly in the city. If the employer has employees who work more than 80 hours per year in the city, the ordinance applies to all such employees. However, an employer located outside the city does not have this obligation as long as the injunction stands.
  5. Employer located in the city. If the employer is physically located within the city, the ordinance applies to all eligible employees. The injunction does not apply to employers located within the city.

Remember, this could all change upon the Court of Appeals issuing its decision in a few months. Until then, these are thresholds to consider in determining whether the city’s ordinance applies to you now.  But that could change in the very near future dependent on how the Court rules.  For now, if the ordinance applies to you, here is a link to the applicable guidance offered by the City of Minneapolis.

As always, consult with your attorney or professional employment advisor on how to analyze your particular situation.

 

This article was written by Michael Glover and Jason Engkjer, co-chairs of the Lommen Abdo Transportation Law Practice Group primarily for transportation services providers. However, the article’s content can be relevant to other industries as well. Importantly, it is intended to provide an overview of the topic and not to give legal advice. As always, if you have any questions about the article, the Transportation Law Practice Group, or other legal issues, please contact Michael Glover at 612.336.1269 / mglover@lommen.com, Jason Engkjer at 612.336.9303 / jengkjer@lommen.com or Stacey DeKalb at 612.336.9310 / stacey@lommen.com.

The new Minneapolis ordinance will be subject to considerable discussion and disputes as it becomes effective in July 2017. Feel free to contact Stacey DeKalb, Chair of the firm’s Employment Law Practice Group at 612.336.9310 / stacey@lommen.com for assistance in drafting or revising your company’s Employee Handbook or Paid Time Off/Vacation Policies prior to July 1, 2017. However, federally regulated transportation services providers may be affected by this ordinance differently than other employers because of federal preemption issues. If your business is a federally regulated transportation service provider, contact Michael Glover at 612.336.1269 / mglover@lommen.com or Jason Engkjer at 612.336.9303 / jengkjer@lommen.com.