Minnesota Enacts the Women’s Economic Security Act Imposing Many New Obligations On Employers

by Dorsey & Whitney LLP
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On Sunday, May 11, 2014, Governor Mark Dayton signed into law a package of bills dubbed the Women’s Economic Security Act (“WESA”), which will have significant implications for Minnesota employers. Many of WESA’s provisions go into effect immediately, and as such, employers should be aware of these significant changes to Minnesota law and adjust their policies and practices accordingly. The following is a summary of key provisions in WESA.

Pregnancy Accommodations
WESA creates a new section, codified at Minn. Stat § 181.9414, that requires Minnesota employers to provide pregnancy accommodations. Under the provisions of the new law, an employer generally must provide reasonable accommodations to a female employee for “health conditions related to pregnancy or childbirth if she so requests, with the advice of her licensed health care provider or certified doula.” A pregnant employee is not required to obtain the advice of her licensed health care provider or certified doula in order to request (1) more frequent restroom, food, and water breaks, (2) seating, and (3) limits on lifting over 20 pounds. Whether requiring “advice” means that employers may request a medical provider’s note prior to granting an accommodation remains unclear, but given the development of the bill through the legislative process, employers should exercise caution before requiring a pregnant employee to provide a medical provider certification as a precondition to granting an accommodation.

Employers are not required to provide an accommodation if doing so would impose an undue hardship on the employer’s business. However, employers may not claim an undue hardship if the employee only requests more frequent restroom, food, and water breaks; seating; and/or limits on lifting over 20 pounds. The law also provides that employers are not required to create a new or additional position or to discharge any employee, transfer any employee with greater seniority, or promote any employee as a form of reasonable accommodation.

An employer may not require an employee to take leave or to accept an accommodation. Rather, employers and employees must engage in an interactive process with respect to the employee’s request for reasonable accommodation.

The new statute prohibits employers from retaliating against an employee for requesting or obtaining a pregnancy accommodation.

The provisions of § 181.9414 become effective immediately.

Pregnancy and Parenting Leave
Minn. Stat § 181.941 has been amended to provide up to twelve weeks of unpaid leave for (1) a biological or adoptive parent in conjunction with the birth or adoption of a child, or (2) a female employee for prenatal care, or incapacity due to pregnancy, childbirth, or related health conditions. Previously, § 181.941 provided employees with six weeks of unpaid leave for the birth or adoption of a child and did not provide for leave due to pregnancy related conditions. The leave provided by Minn. Stat § 181.941 may be reduced by any period of paid leave or vacation, as well as leave under the FMLA, if applicable, so that the total required leave for the employee does not exceed 12 weeks.

Employees are permitted to take this leave when required for prenatal care, or because of incapacity due to pregnancy, childbirth, or related health conditions, or otherwise within 12 months of the birth or adoption of a child.

Employers may continue to adopt reasonable policies governing timing of requests for leave under § 181.941 and may require an employee to give reasonable notice of the date the leave shall commence and the estimated duration of the leave. The amendments to § 181.941 become effective August, 1, 2014.

Wage Disclosure Protection
The new law, codified at Minn. Stat. § 181.172, prohibits employers from (1) requiring nondisclosure by an employee of his or her wages as a condition of employment; (2) requiring an employee to sign a waiver or other document which purports to deny an employee the right to disclose the employee’s wages; or (3) taking any adverse employment action against an employee for disclosing the employee’s own wages or discussing another employee’s wages which have been disclosed voluntarily.

The law does not permit employees to disclose proprietary information, trade secret information, or information that is otherwise subject to a legal privilege or protected by law without the written consent of the employer. Employees also are prohibited from disclosing wage information of other employees to an employer’s competitor.

Employers must include a notice of the employee’s rights and remedies under the new law in their employee handbooks.

The new law prohibits employers from retaliating against an employee for asserting rights and remedies under the new law. An employee may bring a civil action against an employer that unlawfully prohibits an employer from disclosing wages or that retaliates against an employee for asserting rights or remedies under the new law. If a court finds that the employer has violated the new law, the court may award damages, costs (including attorneys’ fees) and/or order reinstatement, back pay, restoration of a lost service credit, or the expungement of any related adverse records of an employee who was the subject of the violation. The provisions of § 181.172 become effective August, 1, 2014.

Nursing Mothers
Minnesota employers are required under Minn. Stat. § 181.939 to provide nursing mothers with reasonable unpaid break time in order to express breast milk and make reasonable efforts to provide a private room for nursing mothers. Amendments to § 181.939 now require employees to provide a private room, other than a bathroom or toilet stall, that is “shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet.”

Most significantly, the amended statute now explicitly prohibits retaliation against an employee who asserts rights under § 181.939. An employee may bring a civil action to recover any damages, including costs and reasonable attorney’s fees (as well as injunctive and other equitable relief), based on a claim that her employer violated § 181.939 or retaliated against the employee. The statute provides that the employer will be held harmless if reasonable effort has been made to comply with its requirements, but it remains unclear whether or how that protection would apply in the context of a retaliation claim.

The amendments also provide that the Division of Labor Standards and Apprenticeship will investigate administrative complaints related to § 181.939 by contacting the employer within two business days and investigating the complaint within ten days of the receipt of the complaint. The amendments to § 181.939 become effective August 1, 2014.

“Familial Status” As A New Protected Class in the Minnesota Human Rights Act
The newly enacted law expands the provisions of the Minnesota Human Rights Act (“MHRA”) by prohibiting employment discrimination on the basis of familial status. The MHRA defines familial status 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 familial status protection also extends to “any person who is pregnant or is in the process of securing legal custody of an individual who has not attained the age of majority.”

Although the implications of this change are potentially broad, a recent letter from the Commissioner of Human Rights suggests that the Department is wary of interpreting discrimination based on familial status too broadly. For example, the Department has responded that neither “failure to provide special accommodations in work schedules due to an employee’s parentage of minor children,” nor “failure to provide special accommodations or exceptions to ordinary performance expectations or evaluations due to the employee’s parentage of minor children or pregnancy,” would constitute discrimination on the basis of familial status. 

As with many other provisions of WESA, the addition of “familial status” to the MHRA is effective immediately.

Sick Leave Benefits and Care of Relatives
Minn. Stat. § 181.9413, which governs use of sick leave benefits to care for relatives, was amended to permit employees to use employer provided sick leave in additional ways. Last year, the law was amended to allow employees to use accrued sick leave benefits to care for the employee’s adult child, spouse, sibling, parent, grandparent, or stepparent, in addition to the employee’s minor children. The new amendments now permit employees to use sick leave benefits in the same manner with respect to an employee’s mother-in-law, father-in-law, and/or grandchildren.

Most significantly, the amended statute now permits employees to use sick leave for “safety leave” for the employee or covered relatives. Safety leave is defined as “leave for the purpose of providing or receiving assistance because of sexual assault, domestic abuse, or stalking.”

Employers may continue to limit the use of sick leave to care for covered relatives other than the employee’s child to a maximum of 160 hours in a 12-month period. Similarly, employers may limit the use of safety leave to a maximum of 160 hours in a 12-month period.

Employers may not retaliate against an employee for requesting or obtaining a leave of absence under the amended law. The amendments to § 181.9413 become effective August 1, 2014.

Equal Pay Certificate
The new law, codified at Minn. Stat. § 363A.44, requires most employers with 40 or more full-time employees in Minnesota (or in a state where the employer has its primary place of business) to obtain an equal pay certificate from the state if it does business with the state in excess of $500,000.

In order to obtain an equal pay certificate, the employer must pay a $150 filing fee and submit an equal pay compliance statement to the Commissioner of Human Rights that certifies:

  1. that the business is in compliance with Title VII of the Civil Rights Act of 1964, Equal Pay Act of 1963, Minnesota Human Rights Act, and Minnesota Equal Pay for Equal Work Law;
     
  2. that the average compensation for its female employees is not consistently below the average compensation for its male employees within each of the major job categories in the EEO-1 employee information report for which an employee is expected to perform work under the contract, taking into account factors such as length of service, requirements of specific jobs, experience, skill, effort, responsibility, working conditions of the job, or other mitigating factors;
  3. that the business does not restrict employees of one sex to certain job classifications and makes retention and promotion decisions without regard to sex;
  4. that wage and benefit disparities are corrected when identified to ensure compliance with the laws cited in clause (1) and with clause (2); and
  5. how often wages and benefits are evaluated to ensure compliance with the laws cited in clause (1) and with clause (2).

The equal pay compliance statement must also indicate what type of approach the employer uses in setting its compensation and benefits: (1) a market pricing approach; (2) a state prevailing wage or union contract requirements; (3) a performance pay system (4) an internal analysis; or (5) an alternative approach to determine what level of wages and benefits to pay its employees, and if the business uses an alternative approach, the business must provide a description of its approach. The Department recently issued a sample Equal Pay Compliance Statement Application.

The Commissioner may reject an application for an equal pay certificate only if the employer’s application does not comply with the above requirements. Further, employers that fail to make a good-faith effort to comply with the provisions of § 363A.44 or that have multiple violations of the laws identified in the equal pay compliance statement may have their certificate suspended or revoked.

Under the new law, the Commissioner is given the authority to audit state contractors to ensure compliance with the new provisions. Employers that are audited must now provide the commissioner with the following information: (1) the number of male employees; (2) the number of female employees; (3) average annualized salaries paid to male employees and to female employees, in the manner most consistent with the employer’s compensation system, within each major job category; (4) information on performance payments, benefits, or other elements of compensation, in the manner most consistent with the employer’s compensation system, if requested by the commissioner as part of a determination as to whether these elements of compensation are different for male and female employees; (5) average length of service for male and female employees in each major job category; and (6) other information identified by the business or by the commissioner, as needed, to determine compliance.

Finally – and importantly for employers – the Commissioner recently issued a letter in response to concerns that the new equal pay certificate provisions require employers to implement concepts of comparable worth. Comparable worth standards require employers to pay employees in “female dominated” jobs at the same compensation levels as employees in “male dominated” jobs, based on a subjective points-based job evaluation system. In the Commissioner’s letter, the Commissioner made clear that the Department interprets the new provisions as ensuring compliance with equal pay laws, and that it does not require employers to adopt comparable worth policies.

Employers that contract with the State will not have much time to wrap their heads around these new requirements. The law goes into effect August 1, 2014, and applies to any “solicitation made on or after that date.”

Conclusion
The new provisions in WESA bring sweeping changes to the employment law landscape in Minnesota and could cause problems for many employers, Employers should be aware of these changes and adjust their policies accordingly, especially in light of the fact that many of these provisions become effective immediately.

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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