Employment and Labor Law Changes from 2024 Session

by Sam Richie & Shannon K. Mitchell, AASP-MN Lobbyists

Lawmakers spent time during the 2024 legislative session making tweaks to a couple of major new pieces of legislation that were passed during the 2023 session.

This article will look at some of the adjustments and changes to the state’s Paid Family and Medical Leave (PFML) law as well as changes to the new Earned Sick and Safe Time (ESST) law.

First, it’s important to differentiate between these two somewhat similar but different new programs. PFML requires all Minnesota employers to provide most employees paid family and medical leave for up to 12 weeks with partial wage replacement for a qualifying event. The program is funded by a payroll tax split between employers and employees, but this program does not begin until January 1, 2026. 

The ESST program, however, is already in force having started on January 1, 2024. It requires Minnesota employers to provide paid sick and safe time to employees that can be used for certain reasons, including when an employee is sick, to care for a sick family member or to seek assistance if an employee or their family member has experienced domestic abuse, sexual assault or stalking. Unlike PFLM, ESST is accrued over time. An employee earns one hour for every 30 hours worked with a yearly cap of 48 hours. 

Because the ESST program is already in effect, we will start with the changes to that program before moving on to address changes to PFML.

ESST Changes and Requirements

Penalty Changes

One early change lawmakers sought to address was to clarify the penalty for employers who do not provide ESST as required. If an employer fails to provide ESST, they are liable for an amount equal to all ESST that should or could have been used, plus an equal amount of liquidated damages.

Another penalty related change relates to employer recordkeeping responsibilities. If an employer fails to retain records that show the ESST an employee should have received, the employer is liable to the employee for 48 hours of ESST for each year ESST was not provided, as well as an equal amount in liquidated damages. 

For both these penalty changes, the employer will owe double what should have been paid to the employee after accounting for liquidated damages. 

Expanded Eligible Uses of ESST 

Another area of change this year is an addition to the list of reasons employees may use ESST. In addition to the previously covered uses, employees may now use ESST to attend a wider array of activities related to the death of a family member. Specifically, employees may use ESST to plan or attend a funeral or memorial service of a family member. They may also use ESST to address legal or financial issues related to the death of a family member. 

As a reminder, the definition of a family member for the purposes of the ESST program is extremely broad and includes: 

1.   Their child, including foster child, adult child, legal ward, child for whom the employee is legal guardian or child to whom the employee stands or stood in loco parentis (in place of a parent);

2.  Their spouse or registered domestic partner;

3.  Their sibling, stepsibling or foster sibling;

4.  Their biological, adoptive or foster parent, stepparent or a person who stood in loco parentis (in place of a parent) when the employee was a minor child;

5.  Their grandchild, foster grandchild or step-grandchild;

6.  Their grandparent or step-grandparent;

7.  A child of a sibling of the employee;

8.  A sibling of the parents of the employee;

9.  A child-in-law or sibling-in-law;

10.  Any of the family members listed in 1 through 9 above of an employee’s spouse or registered domestic partner;

11.   Any other individual related by blood or whose close association with the employee is the equivalent of a family relationship; and

12.  Up to one individual annually designated by the employee.

Changes to Minnesota Paid Family Leave Program

The legislature also amended the Minnesota Paid Family Leave law, which was originally passed in 2023 but does not go into effect until January 1, 2026. The law requires employers to provide most employees paid family and medical leave for up to 12 weeks with partial wage replacement for any individual qualifying event. The program is funded via a payroll tax that can be split between employers and employees. An employee is eligible for 12 weeks of family leave, 12 weeks of medical leave or a combination of the two not to exceed 20 weeks. 

Payroll Tax Increase

One major change to the law during the 2024 session that received much attention is an increase of the payroll tax utilized to fund the program. Under the law passed in 2023, this payroll tax was set at 0.7 percent. But as more was learned about the costs of administering the program that tax has been increased to 0.88 percent – roughly a 25 percent increase. 

Minimum Increment of One Calendar Day

Another change enacted in 2024 clarifies the minimum amount of time an employee can take under the program. The new requirement for PFML is for at least one calendar day. 

Small Employer Definition Changes

Employers with 30 or fewer employees who also have an average wage rate equal to or less than 150 percent of the state’s average wage for the last year are eligible to apply for assistance grants. There is now a premium rate for these small employers of .77 percent instead of the .88 percent that is otherwise mandated. If these small employers meet the eligibility requirements, 25 percent of the rate must be paid by the employer with the remaining amount paid by the employee via wage deductions as needed to fund the full amount. 

There are a handful of other employment law related provisions that passed during the 2024 session that I’d like to briefly touch on. 

Increased Penalties for Employee Misclassification

Lawmakers increased the penalties for misclassification of employees as independent contractors and broadened the scope of who could be liable for said misclassification. Any individual who is an owner, partner, principal, member, officer or agent who knowingly or repeatedly engages in employee misclassification may be subject to a fine. The penalty for this misclassification has been increased to $10,000 for each individual an employer failed to correctly classify. These changes are aimed mainly at the construction industry but apply more broadly and should be understood by AASP-MN members. 

Salary Ranges Required in Job Postings

Starting in 2025, employers with 30 or more employees must disclose the starting salary range, and a general description of all benefits and other compensation in job postings. Any employer with 30 or more employees that does not offer a salary range for a position is instead required to list a fixed pay rate.

Want more? Check out the July 2024 issue of AASP-MN News!