Working Remotely? Welcome to Minneapolis and Its SST Ordinance

Now that the Minnesota Supreme Court has settled the issue of applying the Minneapolis Sick and Safe Time (SST) ordinance to employers “with no physical presence in Minneapolis,” what does this mean for employers with employees who are working remotely in their homes within the city? It may mean that those employees are covered by the Minneapolis SST ordinance and possibly by other similar ordinances.

On June 10, 2020, the Minnesota Supreme Court issued its decision in Minnesota Chamber of Commerce v. City of Minneapolis, No. A18-0771, in which it upheld the application of the Minneapolis SST ordinance to any employer whose employees worked the requisite 80 hours in a year in the city regardless of whether the employer had a physical presence (e.g., an office, plant, or other facility) within the city’s borders.

Since early March 2020, due to Minnesota Governor Tim Walz’s various executive orders, many businesses closed partially or entirely to the public and to employees, and nonessential workers were told to stay home. Many employers responded by allowing workers to work remotely if they could do so. Some of those employees reside and now work in their homes located within the city of Minneapolis.

The indefinite remote-work arrangements, which were either adopted voluntarily or forced onto employers and employees, serve to expand the reach of the Minneapolis SST ordinance to employers that do not have a physical presence in the city but have employees who now work from their homes within the city. Some employers have recognized the likely application of the ordinance to their remote workforces, but others have not. The Minneapolis SST ordinance applies to employers with one employee, but the ordinance’s paid SST requirement applies to employers with six or more employees working in the city. Some employers whose employees have been dispersed to their homes outside of the city may find they are no longer subject to the paid time requirements of the ordinance, but employers may find it beneficial in light of the COVID-19 pandemic to continue to follow the ordinance, especially if their employees are expected to return to work in the city eventually.

Employees who work remotely from their homes in Minneapolis will begin to accrue SST at the rate of 1 hour for every 30 hours worked after they have worked at least 80 hours in the city. In the first year of employment, employees may accrue up to 48 hours of SST leave, with a carryover allowance of up to a maximum of 80 hours of unused paid SST, at which point further accruals cease. They may use SST leave after 90 calendar days of employment. Salaried exempt employees accrue one hour for each full workweek. Employers without a physical presence in the city may want to begin tracking the accrual and use of those hours and look back to the date when their employees began to work remotely on a consistent basis.

Employers may, of course, allow their existing paid vacation and leave policies to be used for the purposes of the Minneapolis SST ordinance. If those policies provide paid leave time that meets or exceeds the requirements of the SST ordinance, employers need not offer additional paid leave. Employers may also use the “front-loading” method, which would require allowing at least 48 hours of paid leave time in the employee’s first benefit year and 80 hours in the second year at the start of a selected 12-month period. Existing paid vacation or leave policies may be used for the SST leave. If the front-loading method is used, an employer is not required to keep track of accrual or usage of SST hours, but the SST ordinance requires an employer be able to show if audited that employees had the required number of hours available to them.

Minneapolis employers with employees working remotely from homes in Saint Paul, Minnesota, are not, strictly speaking, bound by the Saint Paul Earned Sick and Safe Time (ESST) ordinance, which applies only to employers having a physical presence in Saint Paul and at least one employee working in the city. However, given the COVID-19 pandemic, which is the cause in most cases of employees working from home, employers may wish to voluntarily follow Saint Paul’s ESST ordinance. For ease of administration and consistency, employers with remote workers in both Minneapolis and Saint Paul may wish to assume the Saint Paul ESST ordinance applies to employees who are working remotely from their homes in the city of Saint Paul.

Similarly, the City of Duluth, Minnesota, has enacted an ESST ordinance. The Duluth ESST ordinance applies to an employer with 5 or more employees who work at least 50 percent of the time in a 12-month period in the city. But it’s unclear whether the Duluth ordinance applies to an employer that has no physical presence in the city. Also, the accrual provisions of Duluth’s ESST ordinance differ from those contained in the Minneapolis ordinance. Employers with employees in the City of Duluth may wish to review their situation carefully.

With fall and the start of the school year underway, and many employees working from home due to delayed school openings or the unavailability of child care—and many employers having decided to keep their physical offices closed until at least 2021—it may be a good time to review leave policies and the possible application of paid sick and safe time ordinances to remote workers.

Ogletree Deakins will continue to monitor and report on developments with respect to the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar programs.