2014 Minnesota Legislative Session Opens with Multiple Bills of Concern to Minnesota Employers

by Dorsey & Whitney LLP
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Members of the Minnesota legislature recently introduced seven bills that could have very significant implications for Minnesota employers if passed into law. The bills will be heard in House committees this week and may move into the Senate this week or next. The following is a summary of those bills and their possible implications:

HF 2373 – Comparable Worth Pay Standards

The proposed law would require most employers with more than 40 employees in Minnesota to implement “comparable worth” pay standards if they do business with the state in excess of $500,000.

This would be the first law enacted by any state legislature to impose comparable worth pay standards on the private sector, and though limited to larger state contracts in the current version of the bill, the potential for a slippery slope to much broader regulation is clear.

This law is not designed to address the possibility of gender-based pay discrimination. If women are excluded from certain well-paid positions, or if they are paid less than men within a given position, current law already provides remedies to prevent discriminatory pay practices.

Rather, comparable worth standards require employers to pay employees in “female dominated” jobs at the same compensation levels as employees in “male dominated” jobs. These comparisons are not based on market forces – i.e., are employees in one kind of job harder to find or do they play a greater role in driving revenue – but rather are driven by a subjective points-based job evaluation system.

The comparable worth legislation would require covered employers to implement new or substantially revised job descriptions and a job-evaluation system designed not to focus on performance expectations but rather on the subjective “value” of different positions. Employers would be required to determine if any job categories are male- or female-dominated, and then evaluate the relative pay for employees in male- and female-dominated job categories which have similar job scores. If there are pay “disparities” between male- and female-dominated job categories with similar job scores, employers must increase the pay of the lower-paid job category based on the points-based assessment of that job’s “value” to the employer.

This bill is not necessary to prevent gender-based pay discrimination in Minnesota, and it will fundamentally distort the market for labor in Minnesota. It also will impose significant new costs and administrative burdens on covered employers. Thus, this bill would put covered employers at a competitive disadvantage, risking lost business opportunities to competitors in other states – and ultimately lost jobs in Minnesota.

HF 2461 – Paid Sick and Safe Time Required

The proposed law would require Minnesota employers to provide their employees with paid “sick and safe time” leave. Employees working for employers with 21 or more employees would accrue 1 hour of sick and safe time leave for every 30 hours worked, up to a maximum of 72 hours in a calendar year. Employees of smaller employers could accrue up to 40 hours of sick and safe time in a calendar year. Under the proposed act, earned sick and safe time leave would be carried over from year to year, without a maximum accrual limit, and employers must reinstate accrued sick and safe time if a former employee is rehired by the employer at any time within 12 months of his or her prior separation.

Employees would be allowed to use accrued sick and safe time leave for (1) mental or physical illness, injury, or health condition, (2) need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition, or (3) need for preventive medical or health care. Employees would also be allowed to use sick and safe time leave under the same conditions for the employee’s spouse, child, parent, grandparent, sibling, or extended family member.

Additionally, employees would be allowed to use earned sick and safe time leave for absences due to domestic abuse, sexual assault, or stalking of the employee, or the employee’s child, spouse, parent, grandparent, sibling, or extended family member, provided the absence is to: (1) seek medical attention relating to physical or psychological injury or disability caused by domestic abuse, sexual assault, or stalking, (2) obtain services from a victim services organization, (3) obtain psychological or other counseling, (4) seek relocation due to domestic abuse, sexual assault, or stalking, or (5) take legal action.

With respect to using sick and safe time to care for others, the proposed law is virtually unlimited. “Extended family member” is defined as “any individual related by blood or affinity whose close association with the covered employee is the equivalent of a family relationship.”

Finally, an employee would be able to use earned sick and safe time leave for the closure of the employee’s place of business by order of a public official due to weather or other emergency, or for the closure of a school or place of care by a public official due to weather or public emergency.

Employers that already have a paid sick and safe time policy in place would not be required to provide additional paid time off so long as the amount of sick and safe time provided is equal to the amount required by statute and can be used for the same purposes and under the same conditions as required under the proposed act. Other employers would be required to implement paid sick and safe time policies for the first time.

Even for employers with existing PTO policies, however, it remains unclear whether employers would be required to adjust their accrual procedures to the formula mandated by statute. Likewise, the provisions requiring employers to carry over accrued sick and safe time year to year, without a maximum accrual limit; reinstate accrued sick leave after a break in employment; and allow employees to use sick time to care for “any individual related by blood or affinity” would impose significant burdens on all employers.

Further, employers sued by employees for allegedly failing to provide sick or safe time in accordance with the proposed act would be subject to paying “any actual damages suffered as a result of the employer’s failure to provide earned sick and safe time,” as well as other damages, injunctive relief and attorneys' fees. This provision creates a serious risk of claims for consequential damages as a result of disputes with employees over entitlement to sick or safe leave time.

HF 2300 – Employment Discrimination Based on Familial or Caregiver Status Prohibited

The proposed law would create two additional protected classes under the Minnesota Human Rights Act (“MHRA”): “familial status” and “status as a family caregiver.”

“Familial status” is defined in the MHRA under the fair housing law provisions as “the condition of one or more minors being domiciled with (1) their parent or parents or the minor's legal guardian or (2) the designee of the parent or parents or guardian with the written permission of the parent or parents or guardian.”

The proposed definition for “family caregiver” is a “person who cares for another person: (1) who is related by blood, marriage, or legal custody, or (2) with whom the person lives in a familial relationship.”

Employees’ rights to provide care for family members with serious health conditions already are protected under statutes like the Family Medical Leave Act. The addition of these two protected classes would make most, if not all employees, "protected" under the MHRA, substantially increasing the risk of litigation whenever an employee is disciplined or terminated. In addition to broadening the reach of the MHRA to cover nearly every Minnesota employee, it also is unclear what rights employers would have to enforce attendance or performance expectations when employees claim that their absenteeism or poor performance was the result of their parenting or “family caregiver” responsibilities. As proposed, this bill could hamstring employers’ ability to manage their workforces.

HF 2274 – Wage Disclosure Protected; Retaliation Prohibited

The proposed law would amend the MHRA to prohibit employers from “discharging, discriminating or retaliating against, or interfering with an employee that inquired about, disclosed, compared, or discussed the employee’s wages or the wages of any other employee.”

Proponents of this bill argue that this protection is necessary to allow female employees to determine if they are being paid unfairly by their employers. Most employees already enjoy protection under the National Labor Relations Act whenever they discuss the terms and conditions of their employment – including their pay – with their coworkers.

By contrast, this bill would extend employee protections under the MHRA even to egregious misconduct, such as publishing other employees’ confidential compensation information on the internet or otherwise making co-workers’ private compensation information public.

HF 2371 – Pregnancy and Parenting Leave Expanded; Pregnancy Accommodations Required

Under Minnesota’s current Parental Leave Law, employees are entitled to 6 weeks of unpaid leave in conjunction with the birth or adoption of a child.

The proposed act would modify Minnesota’s Parenting Leave Law to require employers to provide 12 weeks of unpaid leave for an employee for the following purposes: (1) the birth or adoption of a child, or (2) for a female employee for prenatal care, or incapacity due to pregnancy, childbirth, or related health conditions. The bill would require employers to provide leave at any time within 12 months of the birth or adoption, creating significant planning difficulties for employers who cannot anticipate when an employee may request leave.

The law also would require employers to provide accommodations for female employees for conditions related to pregnancy, childbirth, or related health conditions. Those accommodations would be required at the employee’s request and employees would not be required to provide medical certification demonstrating that the leave is required. The bill includes no undue hardship exception to the leave requirement, unlike existing protections for pregnant women/new mothers under existing law such as the Americans With Disabilities Act.

Pregnant employees also could request a transfer to a less strenuous or hazardous position for the duration of the pregnancy, which employers must accommodate if reasonably possible. Employers are not expressly required to create new positions under the bill as proposed, but there is no undue hardship exception to the transfer requirement.

HF 2259 – Nursing Mothers; Unfair Employment Practices Clarified

This bill would enlarge the scope of an employer’s obligation to provide space for nursing mothers by enhancing privacy requirements and requiring the employer-provided space to have access to an electrical outlet. It also would make a violation of the law requiring break time for nursing mothers a violation of the MHRA.

SF 2322 – Regulating Certain Human Rights Actions; Requiring Jury Trials

Under current Minnesota law, any action brought under the MHRA is heard and determined by a judge sitting without a jury. This bill would amend the MHRA to provide that a “person bringing a civil action seeking redress for an unfair discriminatory practice is entitled to a jury trial.”

This bill is problematic in a number of ways. First, it would give judges less discretion in decision making. Currently, Minnesota judges can either hear cases brought under the MHRA without a jury, or appoint an advisory jury if the judge believes that it would be useful in a particular case. This system has worked well for many years. Under this bill, judges would instead be required to appoint a jury, even if a case would be better suited without one. Second, the bill would increase the already large workload for judges. Jury trials are, by nature, longer and more difficult on the judicial system. Requiring jury trials for claims brought under the MHRA would clog the judicial system, impose greater burdens on judges, court administrators and jurors, and slow the administration of justice in MHRA cases and every other case brought in Minnesota courts. Finally, the bill would increase the expense and time involved in resolving MHRA cases.

Conclusion

Each of these bills has significant momentum in the legislature, so Minnesota employers should be aware of them and their possible implications. Employers that may be adversely affected by these bills may want to consider contacting their state representative to voice their concerns.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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