Attorney
Kennedy & Graven, Chartered
The Earned Sick and Safe Time Act (“ESST”), which passed on May 24, 2023, initially took effect on January 1, 2024, and was amended on May 24, 2024, to expand coverage and applicability. The new law applies to any employer with one or more employees, so there is no small city exemption, and applies to school districts, nonprofit organizations (encompassing charter schools), and other governmental subdivisions. Employees covered by ESST now include people employed, including temporary and part-time employees, and whom the employer anticipates working for at least 80 hours a year.
The law grants covered employees the right to accrue one hour of sick and safe leave for every 30 hours worked, up to a maximum of 48 hours per year. Employees may carry over accrued hours, but the accumulated hours may not exceed 80. Alternatively, employers may frontload the ESST accrual to comply with the new ESST requirements. Under the front-loading method, employers must provide employees with 48 hours of ESST if the employer pays out unused ESST at the end of the year. If the employer does not pay out unused ESST at the end of the year, an employer using the frontloading method must frontload 80 hours of ESST. However, certain individuals, including but not limited to, federal employees, independent contractors, elected officials, and temporary employees of staffing agencies (considered employees of the staffing agency) are exempt from ESST coverage. Because ESST is now law, employers, including school districts, will want to begin preparing for the new paid leave benefit for their employees and proactively consider and address possible new challenges concerning ESST (e.g., how to effectively track ESST leave and how it may interplay with other types of leave, including, but not limited to, soon-to-be-paid family and medical leave as well as exiting employer-sponsored leave).
Before the Minnesota Legislature made updates and changes to this law during the 2024 Legislative Session, ESST had required employers to provide on the statement of earnings the total number of ESST hours accrued and available for use and the hours used during the pay period. It also refers to the “hourly rate” for calculating ESST pay, and it did not apply to greater sick leave or paid time off (“PTO”) amount provided by the employer, and did not impose any penalties for violating the law. The 2023 version of ESST allowed an employer to require notice of intent to use ESST up to 7 days in advance if the reason for leave is foreseeable and the employer has a written policy that is provided to employees. It also allowed the employer to require reasonable documentation for more than 3 consecutive workdays.
The law, as amended and updated, now states that employees using ESST must be paid equal to the base rate the employee earns from employment. The amendment also redefined the term “employee” to expand coverage of who is and is not considered an employee for ESST leave. A couple of additional “eligible uses” were added for earned sick and safe time, including the “need to make arrangements for or attend funeral services or a memorial, or address financial or legal matters that arise after the death of a family member.” The Legislature clarified that reasonable documentation for the use of earned sick and safe time is required after “three consecutive scheduled workdays,” and if it cannot be obtained in a “reasonable time or without added expense,” then the employee may provide a written statement of the purpose for the use of earned sick and safe time.
The total number of hours accrued and available for use and hours used during the pay period is no longer required on the statement of earnings, but that information must still be provided to each employee at the end of each pay period through a “reasonable system.” The Legislature also clarified that, any sick time provided by an employer that is more than the law’s requirements, must meet or exceed the standards required under the ESST law. The Legislature confirmed that employers face potential liability if they are not in compliance with the ESST law in the following circumstances.
With these updates in mind, it is important to understand that while sick leave was traditionally for self-care, and while the Family and Medical Leave Act (“FMLA”) permitted leave for a narrow set of family members, ESST may be used to care for many more relatives, including, but not limited to, child (including a foster child), spouses, domestic partners, siblings, grandparents, and any family members of an employee’s spouse or registered domestic partner. ESST can also be used as it is accrued—there is no waiting period—for a wide variety of uses, including, but not limited to, carrying for themselves and family members. Additionally, leave under ESST does not limit or otherwise affect the applicability of other laws that extend other protections to employees, rendering ESST leave discrete from other leave. As a result, nothing prevents an employee from using ESST hours concurrently or consecutively with FMLA or other protected time to mitigate wage loss during leave. This also means that even if there is an overlap with other leave, such as FMLA, an employee does not need to use other leave before, during, or after ESST leave. Employers should properly designate leave under these laws and maintain records and documents, as applicable. For employees covered by a collective bargaining agreement, it is likely that they already receive at least 48 hours of sick leave per year. Furthermore, an employer’s existing leave policy, such as PTO, may already satisfy ESST requirements if the PTO plan: (1) provides employees at least as much time as required by ESST; (2) allows employees to use the time for all of the reasons and under the same conditions required by ESST; and (3) lists on employee pay statements the time accrued and available.
Employers are likely grappling with the administrative overlap between standard PTO, ESST, and FMLA. For many employers, this may lead to the dilemma of leave stacking—offering multiple types of leave without overwhelming their HR systems or confusing employees—which could create significant staffing challenges. Employers could consider consolidating PTO and ESST into a singular bucket of paid leave that complies with all legislative requirements, which would reduce confusion and limit administrative burdens. HR departments should be trained on the nuances of each leave type and how they can be used concurrently or consecutively. Employers should also audit their current leave policies for full compliance, ensuring, to the extent applicable, that PTO policies meet the minimum standards for ESST while allowing for the expanded reasons that ESST covers. This would allow for policies outlined in employee handbooks to be updated, if needed, to provide clear guidance on ESST leave, including, but not limited to, the documentation requirements and, if applicable, integration of ESST with other leaves. If the handbook contradicts state law (for example, demanding more documentation than legally required), such provisions should be removed. Employers can also adopt policies that encourage employees to use ESST concurrently with other leave programs, where applicable, rather than allowing leaves to be taken consecutively. However, as noted above, an employee does not need to use other leave before, during, or after ESST leave.
Additionally, to streamline leave tracking, automated leave management software could be employed. These systems may ensure employees do not overdraw leave, help classify leave types appropriately, and eliminate confusion between state, federal, and employer-provided leaves. Such software can also anticipate complex leave combinations and provide insights into better staffing and budgeting decisions. In addition to compliance with ESST, employers who have unionized workforces face the added complexity of renegotiating collective bargaining agreements. As noted above, many unions may have already secured more generous sick leave provisions, but these agreements need to be updated to align with ESST’s specific requirements. Employers should consider engaging unions early in the process to negotiate ESST compliance without compromising existing leave benefits. This can be done by folding ESST into existing leave policies, subject to meeting all ESST requirements. Proactive communication and negotiation will be key to ensuring compliance without disrupting established agreements or employee satisfaction.
Employers are responsible for following the ESST requirements. Failure to do so will subject the employer to penalties that are enforced by the Minnesota Department of Labor and Industry (“DLI”). DLI may issue a cease-and-desist order, require back pay, gratuities, compensatory damages, an equal amount as liquidated damages, and litigation and hearing costs. Repeated and willful violations will be subject to a civil penalty of up to $10,000 per violation. Recordkeeping violations will be subject to a penalty of up to $10,000 per failure. In addition, affected employees will have three years to bring a civil lawsuit to address alleged ESST violations and recover damages, costs, reasonable attorney’s fees, and injunctive and other equitable relief. Accordingly, understanding and complying with the new ESST laws in Minnesota is essential for employers. Employers are encouraged to seek legal advice for specific scenarios and to ensure compliance.
This article is intended to provide general information with commentary. It should not be relied on as legal advice. If required, legal advice regarding this topic should be obtained from district legal counsel.
Alemayehu Z. Ditamo is an attorney with the law firm of Kennedy & Graven, Chartered. For more information, please contact him at (612) 337-9306 or aditamo@kennedy-graven.com.
© Alemayehu Z. Ditamo (2024). Used with permission.
