Preparing for New Minnesota Laws: Earned Sick and Safe Time; Paid Family and Medical Leave
June 23, 2023 - Minnesota Governor Tim Waltz recently signed into law the Omnibus Jobs Act which includes two provisions that will greatly affect Minnesotans and their employers. Employers should be aware that the new provisions will go into effect at different time intervals; 2024 for Earned Sick and Safe Time and 2026 for Paid Family and Medical Leave. Because of the complexity of these two new provisions, employers should start preparing for compliance as both have specific reporting and/or employee communications requirements. A summary of these new provisions can be found below. Please consult with your advisor or refer to official Minnesota government communications for more details.
Minnesota Earned Sick and Safe Time
Effective Jan. 1, 2024, Minnesota’s Earned Sick and Safe Time law requires employers to provide paid leave to employees who work in the state with a certain amount of paid time off for various personal and family-related reasons such as personal illness, medical appointments, caring for a family member's health issues, or addressing domestic violence, sexual assault, stalking situations, or weather disruptions. However, employers must comply with local earned sick and safe time laws that are more generous to employees in Minnesota.
Eligibility: The law applies to most employees working within the Minnesota state boundaries and includes full-time, temporary, and part-time employees who work at least 80 hours in a year. There are a few exceptions such as federal employees and independent contractors.
Accrual of Time: Employees generally accrue sick and safe time at a rate of one hour for every 30 hours worked, up to 48 hours per year. 80 hours can be carried over from year to year. In place of this accrual formula, employers may instead front load 48 hours per year (with unused time paid out) or 80 hours per year (no payout requirement).
Vacation, Sick Time, and PTO Policies: Employers who still have separate vacation and sick buckets should consider moving to a paid time off (PTO) policy written to comply with this law, to keep their paid leave within budget.
Employee earnings statements: Must show the total number of earned sick and safe time hours accrued and available for use, and the total number of earned sick and safe time hours used during the pay period.
Employee Notice and Documentation: Employers may require reasonable notice and documentation for absences exceeding three consecutive workdays.
For more detailed information on the Minnesota Earned Sick and Safe Time law, visit the official website at https://www.dli.mn.gov/sick-leave.
Minnesota Paid Family and Medical Leave
Effective on January 1, 2026, Minnesota will introduce the Paid Family and Medical Leave program, providing paid time off for qualifying events. Key details about the program include the following:
Premium Rate: The premiums for paid family and medical leave will be 0.7% of an employee's wages. Employers have the option to charge a maximum of half this premium (0.35%) to their employees through a wage deduction.
Premium Payment Start Date: Premiums for paid family and medical leave will be collected beginning on January 1, 2026.
Payment Process: The program will introduce an employer account system for managing premium payments, similar to unemployment benefits. Further information regarding payment procedures will be provided on the program's official website closer to the program's start date.
Employers' Roles and Responsibilities: Employers will have several crucial responsibilities within the program, including:
Wage Detail Report: Starting in mid-2024, most Minnesota employers will be required to submit a wage detail report, which outlines quarterly wages received and hours worked for each employee.
Employee Notification: Starting in late 2025, employers must notify their employees about the program. The program will provide the necessary language for this notification.
Premium Payments: Beginning in January 2026, employers will be required to submit premium payments when they are due.
As the launch of the Minnesota Paid Family and Medical Leave program approaches, employers should stay informed about updates and guidance provided on the program's official website, https://mn.gov/deed/programs-services/paid-family/
Melissa Doumbia, CPP
Melissa Doumbia, CPP, is a manager at Redpath and Company and leads the payroll services team for the Accounting and Management Outsourcing practice. She works with clients in a variety of industries and has a special expertise providing accounting and payroll services for the construction industry. Melissa’s payroll expertise includes return preparation and filing, tax credits, and tax and regulatory compliance. She also has experience providing union payroll and benefits and preparing and filing of Form 1099. Melissa received her B.A. in Political Science and International Studies from Macalester College. She has been providing accounting and payroll services since 1998 and joined Redpath and Company in 2022.
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