Effective January 1, 2024
Approaching the rollout of Minnesota’s Earned Sick and Safe Time (ESST) law, it’s pivotal for employers and employees to familiarize themselves with the impending changes. This proactive understanding not only ensures compliance but also establishes the groundwork for a harmonious work environment prioritizing the rights and well-being of employees.
Quick Overview of Minnesota’s ESST Law:
Who is Covered? The law applies to all employees working in Minnesota, including temporary and part-time workers. Exemptions include independent contractors, federal employees, and those in the building and construction industry represented by a labor organization.
Earning ESST Hours: Employees accrue 1 hour of ESST for every 30 hours worked, up to 48 hours a year. A total of 48 hours can be accumulated each year. Existing PTO policies may already meet the ESST requirements.
ESST for Returning Employees: An employee returning within 180 days is entitled to the ESST hours accrued before leaving. No reinstatement of hours paid out upon the previous separation.
Accrual, Front Loading, and Carryover:
Accrual of Hours: Accrual begins on the first day of employment, with one hour of ESST for every 30 hours worked. Amounts available and used per pay period must be listed on the employee’s paystub.
ESST Hours Cap: Employees can accrue up to 48 hours a year, carried over until an 80-hour maximum is reached. Employers may agree to higher limits but not lower.
Salaried and Exempt Employees: Exempt employees are presumed to work 40 hours a week for ESST accrual.
Options for Employers:
- Accrual and Carryover:
- Employees begin accruing ESST from day one.
- Up to 48 hours of ESST accrued annually, with carryover.
- Unused hours may be carried over into the next year, capped at 80 hours.
- Front Loading with Payout:
- Minimum 48 hours provided at the start of each year.
- Unused hours are paid out at the end of the accrual year at the employee’s hourly rate.
- Front Loading with No Payout:
- Minimum 80 hours provided at the start of each year.
- Unused hours are not paid out at the end of the accrual year.
Unused ESST Hours: Employers are not required to pay out unused ESST.
Using ESST Hours:
- Employees may use ESST as it is accrued.
- Employers may require notice for foreseeable ESST use.
- Documentation may be required for more than three consecutive days of ESST use.
- Employees are not required to specify the reason for ESST use.
- Employers must keep medical reasons confidential.
- ESST can be used in the smallest time increment.
Rates of Pay:
- ESST must be paid at the same hourly rate as the employee earns from employment.
- If multiple rates of pay exist, ESST pay aligns with the rate for which it was used.
Notice to Employees:
- Employers must provide notice including ESST entitlement, accrual details, terms for usage, existing policies, and anti-retaliation information.
- Notice methods include posting at work locations, providing physical or electronic copies, or inclusion in employee handbooks.
- Compliance is mandatory from January 1, 2024.
Minnesota’s ESST law brings important changes, but understanding its intricacies is key to a successful adaptation. Employers and employees alike should collaborate to ensure a seamless transition into this new era of workplace benefits.
While we at Preference strive to inform and educate our clients whenever possible, we are not attorneys. Should you have any questions, please consult with counsel. For further information, please use the following link to navigate to the MN Dept of Labor’s site: www.dli.mn.gov/sick-leave.
In addition, to the ESST law, Minnesota is also releasing a new law aimed at narrowing the gender and racial pay gap that takes effect. Please refer to the following for more information also beginning January 1, 2024. https://mn.gov/mdhr/employers/pay-history/
Stay informed, stay compliant, and embrace the changes ahead!