Hello Roo friends and fans,
I have been posting regularly on LinkedIn and Facebook (yes, I am a bit old school) about employment law updates throughout the year, but I am long overdue for a blog about these significant changes. The Minnesota legislature and individual cities have been very active over the past two years, and many laws and regulations have been passed, or will be effective in the near future.
While this blog primarily concerns changes in MN, at the Federal level there are also some important changes that are highlighted.
This is a pretty lengthy blog, but it is filled with important information you need to know for your business. It will be critical to update your Employee Handbooks by the end of the year, and again before 1/1/26.
It’s all about the money, money, money…
Minimum Wage
Be sure to check your individual state and city changes, especially if you have employees working remotely in other states!!! California and New York regulations are particularly complex.
Exemption Status changes (this determines if positions are or are not due overtime)
Salary History
In Minnesota, employers are no longer permitted to ask job applicants about their past pay rates or salaries. This is designed to lessen the well documented pay gaps for women and people of color. Currently, Minnesota ranks 20th in gender pay gaps. Over a lifetime of earnings this adds up to an average of $447,090 lower earnings for women, and is even more substantial for women of color (reference: The University of Minnesota Humphrey School of Public Affairs)
Pay Transparency
Time Away from work
Minnesota Earned Sick and Safe Time (ESST)
Copies of Minnesota required postings may be downloaded for free here, or you may pay a service to provide combined state and federal posters for you. Rates are reasonable and are based upon quantity ordered.
This is a lot of information to absorb and implement, even for HR professionals! Please feel free to contact Roo for more information or with questions.
I have been posting regularly on LinkedIn and Facebook (yes, I am a bit old school) about employment law updates throughout the year, but I am long overdue for a blog about these significant changes. The Minnesota legislature and individual cities have been very active over the past two years, and many laws and regulations have been passed, or will be effective in the near future.
While this blog primarily concerns changes in MN, at the Federal level there are also some important changes that are highlighted.
This is a pretty lengthy blog, but it is filled with important information you need to know for your business. It will be critical to update your Employee Handbooks by the end of the year, and again before 1/1/26.
It’s all about the money, money, money…
Minimum Wage
- Federal level and the State of Minnesota
- On 1/1/24 the minimum wage increased to $10.85 per hour for large employers and in Minnesota $8.85 per hour for employers that are not considered large employers.
- Who is a large employer? At the federal level, a large employer is considered an employer with 50 + employees. In Minnesota, companies with revenues greater than $500,000 are considered large employers.
- Minneapolis Ordinance
- Minimum wage of $15.57 per hour for all employers (effective 1/1/24 for large employers and effective 7/1/24 for all employers).
- Applies to any employer in any state if they have an employee who works at least two hours per week in Minneapolis (check your remote work policies).
- Saint Paul Ordinance
- Minimum wage of $15.57 per hour for macro and large employers (101 + employees).
- Minimum wage of $14.00 per hour for small businesses (6 – 100 employees). Increases to $15.00 per hour 7/1/25.
- Minimum wage of $12.25 per hour for micro businesses (5 or fewer employees). Increases to $13.25 per hour 7/1/25.
- Applies to any employer in any state if they have an employee who works at least two hours per week in Saint Paul (check your remote work policies).
Be sure to check your individual state and city changes, especially if you have employees working remotely in other states!!! California and New York regulations are particularly complex.
Exemption Status changes (this determines if positions are or are not due overtime)
- This is a federal law that has been updated by the U.S. Department of Labor.
- To determine whether a position is exempt (paid a salary and exempt from overtime) or non-exempt (typically paid hourly and due overtime) there is both a duties test and a salary test that must be examined.
- Duties test: To potentially qualify as an exempt employee, one must be classified in one of the following categories:
- Executive (running the business)
- Professional (typically requiring education beyond high school)
- Computer Professional (not helpdesk)
- Outside Sales (not Customer Service or Inside Sales)
- Administrative Professional. This is the most difficult category to assess (Administrative Assistants do not qualify, although some high level Executive Assistants may qualify)
- Salary test: If a position passes the duties test, the position must also receive a minimum salary, and people must be paid the same wage every pay period regardless of hours worked. There are a few limited exceptions.
- The salary test does not apply to teachers, or employees practicing law or medicine
- As of 7/1/24, the minimum salary threshold is $844 per week ($43,888 annually)
- As of 1/1/25, the minimum salary threshold will increase to $1,128 per week ($58,656 annually)
- These minimum salary thresholds will be updated every three years at the federal level
Salary History
In Minnesota, employers are no longer permitted to ask job applicants about their past pay rates or salaries. This is designed to lessen the well documented pay gaps for women and people of color. Currently, Minnesota ranks 20th in gender pay gaps. Over a lifetime of earnings this adds up to an average of $447,090 lower earnings for women, and is even more substantial for women of color (reference: The University of Minnesota Humphrey School of Public Affairs)
Pay Transparency
- This law applies to Minnesota employers with 30 + employees and takes effect 1/1/25.
- Covered employers must post the starting salary range or fixed pay rate and a general description of all benefits and other compensation to be offered. The description of benefits includes health and welfare benefits and retirement benefits.
- Salary ranges must be a realistic representation of the actual wages that will be offered (in other words, you cannot post a position listing a salary range of $40,000 – $500,00).
Time Away from work
Minnesota Earned Sick and Safe Time (ESST)
- A handful of individual cities have their own ESST rules, and they are not consistent with each other. A statewide law was effective 1/1/24 to provide unform rules. Employers must still comply with city ordinances if they are more generous than the statewide requirements.
- Employees will earn 1 hour of ESST for every 30 hours worked, not to exceed 48 hours per year.
- This applies to any employee (including interns and temporary staff on your payroll).
- Employers cannot require use of ESST in increments of less than 15 minutes.
- Your existing PTO policies may be used for ESST purposes if PTO offered is 48 hours or greater per year.
- Employers may not ask the reason for the need for ESST use or require documentation of the need for use of ESST unless the absence exceeds 3 days.
- Expanded uses for ESST. In addition to the existing reasons for ESST use, the law has been expanded use of ESST to attend funerals, make funeral arrangements, or address financial or legal issues related to the death of a family member.
- There are several different laws related to pregnancy, prenatal leave and pumping at work. Pregnancy protections became law in 2014 under the Women’s Economic and Security Act (WESA) and amendments were passed in 2021 and 2023. This added many new acronyms!
- As of 8/1/24, pregnant employees can take prenatal medical leave without counting it against their future pregnancy and parental leave entitlement.
- The employee will still get the same health benefits during pregnancy and parental leave and their employer will contribute as if they were working.
- Employers must notify all employees of the rights of pregnant and lactating employees when hired (typically via the Employee Handbook), or when an employee makes an inquiry about or requests parental leave.
- The Minnesota Human Rights Act has a longstanding history of providing protections related to race, age, gender, and more. These protections have now been expanded to include episodic or intermittent conditions, such as diabetes or epilepsy.
- As of 7/1/24, restrictive covenants (such as non-compete agreements) are no longer allowed in Minnesota.
- Paid Leave as of 1/1/26. This law will allow partial payment of wages for up to 20 weeks per year. This is in addition to FMLA qualifying events (grants up to 12 weeks unpaid for birth, serious health conditions and other events). The paid leave will be paid through a new state tax of 0.07%, which will be funded through a combination of employee and employer contributions.
Copies of Minnesota required postings may be downloaded for free here, or you may pay a service to provide combined state and federal posters for you. Rates are reasonable and are based upon quantity ordered.
This is a lot of information to absorb and implement, even for HR professionals! Please feel free to contact Roo for more information or with questions.