Minnesota Employers Beware: 2013 Legislative Changes

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

The 2013 legislative session was a busy one for the state’s legislators. During the 2013 legislative session, the Minnesota legislature passed a number of bills affecting Minnesota employers. As we discussed in our last two blog articles, the legislature passed “ban the box” legislation limiting private employers’ ability to ask about applicants’ criminal backgrounds on employment applications. The legislature also passed a bill giving unions the right to organize private family child care providers and home health care providers who work independently in their own businesses. But there were other notable changes of which Minnesota employers should be aware. 

Use of Sick Leave to Care for Family Members

Minn. Stat. § 181.9413 was amended to expand the use of sick leave from being available to care only for employees’ ill children to being available to care for several additional categories of family members.  

Under the previous statute, employees could use any sick leave provided by their employers to care for their sick or injured children who were under the age of 18 or under the age of 20 and attending secondary school on the same terms upon which the employees were able to use sick leave for their own illnesses.  

Under the new law, employees may use sick leave to care for their minor child, adult child, spouse, sibling, parent, grandparent, or stepparent on the same terms upon which the employees are able to use sick leave for their own illnesses. While employers may not limit the amount of an employee’s sick leave used to care for the employee’s child (including a stepchild, adopted, or foster child), employers may limit the use of sick leave to care for other family members covered by the new law to no less than 160 hours in a 12-month period. 

As with the previous statute, the law applies to employers with 21 or more employees at one site. Also, it only applies to sick leave benefits paid to employees from an employer’s general assets, not short-term or long-term disability benefits or other salary continuation benefits.  

The amended statute is effective on August 1, 2013, and applies to sick leave used on or after that date. Employers should review their sick leave policies to ensure that their policies allow the use of sick leave for family members covered by the new law. 

Same-Sex Marriage

On May 14, 2013, Governor Mark Dayton signed into law a bill legalizing same-sex marriage in Minnesota. Under the new Minnesota law, Minnesota statutes will no longer include the definition of “marriage” as “a civil contract between a man and a woman.” Instead, Minnesota statutes (Minn. Stat. § 517.01) will define “civil marriage” as a “civil contract between two persons.” Therefore, terms referencing marriage (e.g., “marriage,” “marital,” “marry,” or “married”) will now include “civil marriage,” effectively eliminating any distinction between opposite-sex and same-sex marriage. The new law is effective on August 1, 2013.  

The Minnesota legislation—along with the Supreme Court of the United States’s July 26, 2013 decision in United States v. Windsor, which declared the definition of “spouse” in the Defense of Marriage Act (DOMA) as unconstitutional—creates several obligations for Minnesota employers. Minnesota employers should consider how same-sex marriage will affect the benefits they offer to their employees, such as medical coverage and retirement plans, in addition to their federal tax payments and refund opportunities, review their employment policies and practices, and consult with legal counsel as needed. 

Whistleblower Protection

The Minnesota Whistleblower Act, Minn. Stat. §§ 181.931 and 181.932, prohibits employers from, among other things, discharging, disciplining, threatening, otherwise discriminating against, or penalizing an employee because the employee, in good faith, reports a violation or suspected violation of any federal or state law or rule adopted pursuant to law to his or her employer, a governmental entity, or law enforcement official. The Minnesota legislature passed several significant amendments to the Minnesota Whistleblower Act. Specifically, the Act was amended to provide definitions for three terms: “good faith,” “penalize,” and “report.” These terms were previously undefined in the Act.  

Good Faith. The amendment broadens the definition of what constitutes a “good faith” report. It defines a “good faith” report as “any statements or disclosures,” as long as the statements or disclosures are not knowingly false or made in reckless disregard of the truth. Previously, a “good faith” report had been defined through court rulings, and courts required that an employee’s “good faith” report be made “for the purpose of exposing an illegality.” Accordingly, under the new definition, an employee may now report alleged illegalities against only himself or herself and state a viable whistleblower claim. Thus, we expect the number of whistleblower claims to rise. 

Report. The amendment defines the term “report” as any “verbal, written, or electronic communication by an employee about an actual, suspected, or planned violation of a statute, regulation, or common law, whether committed by an employer or a third party.” That is, a “report” now includes not only an employer’s actual or suspected violation, but also a “planned” act. The plaintiff’s bar will likely argue that employees are covered by the Act even if the purported wrongdoing has not yet occurred (or never occurs). Protection may also be extended to employees who report unlawful conduct by anyone, not just employer conduct. 

With the amendments, the Act now also covers reports of suspected violations of common law (e.g., an alleged breach of contract), which arguably significantly expands the scope of the statute. 

Penalize. The amendment defines “penalize” as “conduct that might dissuade a reasonable employee from making or supporting a report, including post-termination conduct by an employer or conduct by an employer for the benefit of a third party.” Prior to the amendment, Minnesota courts had held that employers had to take a more tangible adverse employment action (e.g., a termination, demotion, or pay cut) to violate the Act. The new law appears to adopt a “dissuade” standard and may expand adverse actions beyond those that result in a material change in the terms and conditions of employment.  

The amendment’s extension of coverage for post-employment actions is also significant. Previously, Minnesota courts had held that post-employment actions were not covered by the Whistleblower Act because the statute only protects “employees” as defined in Minn. Stat. § 181.931, subd. 2. 

The amendments became effective on May 25, 2013. Whistleblower claims have increased dramatically in the past several years, and the new amendments may lead to an even greater number of whistleblower lawsuits. 

Wage Payment Penalties

Minn. Stat. §§ 181.13 and 181.14 address the prompt payment of wages and commissions earned and unpaid at the time of an employee’s discharge or voluntary resignation. Both statutes have been amended to include a definition of wages “actually earned and unpaid.” Under the amendment, “[w]ages are actually earned and unpaid if the employee was not paid for all time worked at the employee’s regular rate of pay or at the rate required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater.” 

The new law further clarifies that, if an employee’s earned wages are not promptly paid, the employee may collect wages and commissions actually earned and unpaid, as well as the statutory penalty. The statutory penalty is “equal to the amount of the employee’s average daily earnings at the employee’s regular rate of pay or the rate required by law, whichever rate is greater, for each day up to 15 days, that the employer is in default.” An employee’s demand for payment under the statutes must be in writing, but it does not need to state the precise amount of unpaid wages or commissions. 

Additionally, Minn. Stat. § 181.14 was amended to change the subdivision relating to deductions from the final wages of employees entrusted with property or money. Employers are now prohibited from making “any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer, except as permitted by section 181.79.” The law became effective on April 30, 2013.    

In light of the amendments and potential for increased liability for failure to promptly pay wages, individuals who process and provide final paychecks should be informed of the proper way to handle employees’ demands for final paychecks.  

Service Animals in Public Places

Under Minn. Stat. § 363A.19, it is an unfair discriminatory practice for an owner or operator of a public place to prohibit a person with a disability from bringing a service animal into the public place. The previous statute limited protection to service animals that could be “properly identified as being from a recognized program which trains service animals.” But the amended law states only that the service animal cannot be barred from a public place if it “is properly harnessed or leashed so that the blind or deaf person or a person with a physical or sensory disability may maintain control” of the animal. The amended law also clarifies that “service animal” means a service animal as defined by the federal Americans with Disabilities Act. The law is effective on August 1, 2013. 

Ashlee M. Bekish is an associate in the Minneapolis office of Ogletree Deakins.

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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