Minnesota Paid Leave Program: Update!

10.18.2024 Written by: Henningson & Snoxell, Ltd.

As you may know, Minnesota passed a Paid Leave program in 2023, which goes into effect January 2026. However, beginning in July 2024, most employers are required to begin submitting quarterly wage detail reports to the Paid Leave program; although, no premiums are paid until after the Paid Leave program becomes effective in 2026.

The first wage detail report is due October 31, 2024, and will be based on wages paid between July 1, 2024, and September 30, 2024.

Reporting

Employers must submit wage detail reports every quarter using the Unemployment Insurance (UI) Online system. The wage detail report is the same report required for UI; therefore, employers already utilizing the UI Online system can submit a single wage detail report that will satisfy the reporting requirement for both programs. Your UI accounts for each employee have been automatically converted into a joint UI/Paid Leave account.

For employers with employees not covered by the UI program, you will need to set up a “Paid Leave Only” account (now available) for each employee not covered by UI. Instructions for setting up your account are now available on the Minnesota Paid Leave website and linked below.

Required Information in Wage Detail Report

Employers must include (1) the first and last name, (2) the Social Security number, (3) wages paid during the specified quarterly period, and (4) hours worked for each employee. Again, this is the same information required under the Unemployment Insurance program.

What do employers need to do at this point?

Create Employee Accounts, if necessary: The “Paid Leave Only” accounts are available here. If you do not have an Unemployment Insurance account for each of your employees, you will need to create a Paid Leave Only account for them. If you already have Unemployment Insurance accounts for your employees, you do NOT need to create any new accounts for them. Your quarterly reports will serve both UI and Paid Leave.
Prepare For the Administrative Obligation: We recommend putting in place administrative procedures for quarterly wage detail reports (i.e., who will be responsible for submitting the wage detail report, if not already in place for UI). Failure to submit the required wage detail reports for each employee is subject to a late fee of $10 per employee, with a minimum late fee of $250; administrative service fee of $25 per employee whose information is incomplete; or 2 percent of the total wages for an omitted employee.
Determine Which Employee’s Wage Reports Are Required: Only covered employees in covered employment are required to have reports filed. “Covered employees” include:
1. Employees who performed at least 50 percent of their employment during the past calendar year in the state of Minnesota;
1. Employees who did not perform 50 percent or more of their employment during the past calendar within any single state or Canada, but who resided within Minnesota for at least 50 percent of the past calendar year; and
1. Employees who did not perform 50 percent or more of their employment during the past calendar year within any single state or Canada, but whose employment is controlled and directed from within Minnesota.

“Covered employment” includes any employment, except for (1) self-employed individuals; (2) independent contractors; or (3) seasonal employees.

Also note, while MN employers are required to participate in the Paid Leave program, they may seek an exemption by applying for a private plan exemption beginning in 2025. The private plan must include at least the same rights, protections, and benefits as those provided to employees under the Paid Leave law. However, at this time, employers are still required to file wage reports until an exemption is approved.

We will continue to update you as more information becomes available. Please contact us with any questions about your obligations as an employer under the wage detail reporting requirements or the new Paid Leave program. We are here to help!

FTC’s Non-Compete Ban is blocked!

09.16.2024 Written by: Henningson & Snoxell, Ltd.

The Federal Trade Commission (FTC) published a final rule banning nearly all non-compete agreements, nationwide, on May 7, 2024, to be effective September 4, 2024. However, a recent lawsuit in the United States District Court for the Eastern District of Texas challenged the final rule’s lawfulness. On August 20, 2024, the Court held that the FTC’s non-compete rule was unlawful, and that the FTC lacks any substantive rule making authority with respect to unfair methods of competition. As such, the rule was blocked and non-compete agreements are still available to the extent allowable under Minnesota noncompete law.

Appeals by the FTC from this ruling are expected. Such appeals would be heard by the Fifth Circuit Court of Appeals and possibly even the U.S. Supreme Court, both of which have issued recent decisions reducing the power of federal agencies.

H&S is here to assist you with your questions and concerns regarding non-compete agreements. Give us a call to learn how we can help you continue to protect your business interests.

Corporate Transparency Act: New Reporting Requirement for Beneficial Ownership Information

12.22.2023 Written by: Henningson & Snoxell, Ltd.

Starting January 1, 2024, numerous businesses in the United States will be required to disclose details under the Corporate Transparency Act (CTA) regarding their beneficial owners—those who ultimately have ownership or exert control over the company. This information must be submitted to the Financial Crimes Enforcement Network (FinCEN), which operates as a bureau within the U.S. Department of the Treasury.

Does my company have to report?

The CTA mandates that corporations, limited liability companies, and similar entities must report if they are either: (i) established by filing with a Secretary of State or an equivalent office under State or Indian Tribe laws, or (ii) foreign entities registered to operate in the United States, except for certain exempt entities. Furthermore, most partnerships, including Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), and Limited Liability Limited Partnerships (LLLPs), fall under the CTA’s reporting requirements, as they are typically formed through a state-level filing.

There are many exempt entities, including, but not limited to, public companies, banks, credit unions, tax-exempt entities, and large private companies.

What does my company need to report?

Beneficial owners of reporting companies will first need to be established based on the criteria set forth by FinCEN. Reporting companies will then need to disclose information about these individuals, such as name, date of birth, address, unique ID number, and image, as well as the entity’s name, address, formation jurisdiction and tax identifier.

For entities created or registered after January 1, 2024, there is an additional report needed for the “company applicant.” The company applicant is the individual who first files or registers the entity. Reporting companies established or registered before January 1, 2024, are not required to report information about their company applicants or update this information, as long as it was accurate when initially reported.

When should we report?

Starting January 1, 2024, FinCEN will begin accepting Beneficial Ownership Information (BOI) reports. The deadlines vary based on the company’s formation or registration date:

Companies created or registered before January 1, 2024, must submit their BOI by January 1, 2025.
Companies formed or registered between January 1, 2024, and December 31, 2024, need to report BOI within 90 days after the effective notice of their formation or registration.
For companies established or registered on or after January 1, 2025, BOI must be filed within 30 days following the effective notice of their creation or registration.
Any updates or corrections to previously filed beneficial ownership information should be reported to FinCEN within 30 days of the change.

What are penalties for non-compliance?

Willful failure to report or update ownership information, or providing false information, can lead to severe civil or criminal penalties, including daily fines or imprisonment. Senior officers may be held accountable for their company’s non-compliance. Penalties also apply for intentionally causing a company to fail in its reporting obligations or for providing false information. However, there is a safe harbor from penalties for voluntarily correcting inaccurate reports within 90 days of the original deadline.

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Please note, all information presented in this post is for general informational purposes only, and the content provided is a summary. Please contact our business attorneys to update your governing documents and contracts and for more information and guidance regarding the effect of the CTA on your operations.

Ban on Asking Applicants and Employees about Pay History

12.18.2023 Written by: Henningson & Snoxell, Ltd.

Effective January 1, 2024, all employers in Minnesota will be prohibited from asking job applicants, including contractors and current employees seeking internal promotions or transfers, about their pay history. Employers will need to base a salary offer on market conditions and the applicant’s skills, education, and other qualifications. However, job applicants may voluntarily disclose their pay history with a prospective employer. Employers should review applicant materials and communicate to applicants what information will be used in determining the salary offer.

MINNESOTA’S NEW EARNED SICK AND SAFE TIME LAW

12.13.2023 Written by: Henningson & Snoxell, Ltd.

Effective January 1, 2024, Minnesota’s Earned Sick and Safe Time (ESST) law will require employers with one or more employees to provide paid leave to all employees who work at least eighty (80) hours a year in the state of Minnesota to be used for one of the many permitted purposes specified in the statute.

What responsibilities do employers have?

Employers have the option to either allow employees to accrue ESST at a rate of one hour of paid leave for every 30 hours worked, up to at least 48 hours in a year (the “accrual method”) or use the “frontloading method” whereby the employer ensures that each employee has the requisite amount of ESST frontloaded by January 1, 2024.
Include the total number of ESST hours accrued and available for use; and the total number of ESST hours used on the employee’s earning statements at the end of each pay period.
Provide notice informing the employees about ESST.
Include an ESST notice in any employee handbook.

Under the Accrual Method, employers must allow employees to carry over accrued but unused ESST but may cap the total amount of accrued ESST at 80 hours.

Under the Frontload Method, an employer must frontload 48 or 80 hours depending upon whether they pay out unused ESST at the end of the year.

Policies that already provide paid time off will comply with the ESST law as long as they meet or exceed all necessary criteria and do not include conflicting provisions. It is not mandatory for the paid time off policy or plan to be explicitly labeled as ESST to fulfill the law’s requirements. However, employers may find it beneficial to incorporate references to ESST usage within their policy.

Please note, businesses in Bloomington, Duluth, Minneapolis, and St. Paul are already subject to sick and safe time ordinances. On January 1, 2024, employers will have to follow that which is most generous as it applies to their employees.

Contact us regarding implementation of the ESST law as well as necessary reviews and updates to employee handbooks. We are here to help protect you and your business.

Coming Soon: Minnesota Retirement Program

10.05.2023 Written by: Henningson & Snoxell, Ltd.

The Minnesota Secure Choice Retirement Program Act (the “Program”) establishes a retirement savings program available to state residents employed by covered employers (those with five or more employees who do not already have a retirement program in place). Under the Program, individual retirement accounts (IRAs) will be established for eligible employees to fund with a portion of their paycheck.

Program Features:

Participation in the Program is mandatory for employers that do not currently sponsor their own workforce retirement savings plan, such as a 401(k) plan, or those who have not sponsored one in the 12 months prior to the “Mandatory Implementation” date.
Employers are not required to contribute to their employees’ retirement plan.
“Covered Employees” include any employee of a covered employer who is at least 18 years old and satisfies any other criteria that may be established by the Program’s Board of Directors.
Employees can:
- elect whether their contributions will be pre-tax or post-tax (Roth)
- change their contribution rate
- opt out of participation entirely
Employers must provide Program Information to all covered employees (the Program Information required has not yet been made available by the State).
Annual limits on contributions to an account under this Program will mirror the Federal IRA limits which are subject to annual adjustments. For 2023, these limits are $6,500 for individuals under the age of 50 and $7,500 for individuals over the age of 50.
The Program is set to begin on or after January 1, 2025. The Board of Directors will meet on March 1, 2024, to establish administrative procedures for the Program.

Program Governance: Board of Directors

The Program will be administered by a Board of Directors comprised of seven (7) members: the executive director of the Minnesota State Retirement System; the executive director of the State Board of Investment; three (3) members chosen by the Legislative Commission on Pensions and Retirement with retirement plan expertise; one (1) private-sector member (appointed by the Governor) with plan administration experience; and one (1) small business owner (appointed by the Governor).

Note to Employers:

This means additional requirements for you including, but not limited to, withholding contributions from payroll, remitting the withheld contributions to the program, ensuring all necessary information is provided to employees, etc. So, be sure to pay close attention when this Program becomes effective as civil penalties will be imposed for compliance failures.

We do our best to keep employers updated so that you can make informed decisions as you operate your business. For now, there is no requirement that you implement anything. But if you have any questions or concerns about this Program and what it may mean for your business, please feel free to reach out. A member of our team would be happy to guide you through this change.

Ban on Captive Audiences

09.15.2023 Written by: Henningson & Snoxell, Ltd.

New legislation went into effect on August 1, 2023 that prohibits employers from discharging, disciplining, or otherwise penalizing employees who decline to attend or participate in employer-sponsored meetings, the primary purpose of which is to communicate the employer’s opinion concerning religious or political matters (“Captive Audience Meetings”). The law also protects employees who decline to receive or listen to employer-sponsored communications. Under the statute, retaliation, or the threat thereof, is prohibited as a means of inducing an employee to attend such meetings or receive such communications. And, under no circumstances may an employer take adverse action against an employee making a good-faith report of a violation or suspected violation of this statute.

The statute does not:

Prohibit communication of information that the employer is required by law to communicate.
Limit employers’ right to conduct meetings involving religious or political matters if attendance or listening is wholly voluntary.
Limit employers’ right to communicate with employees or require the attendance of employees at meetings and other events that are necessary for employees to perform their lawfully required job duties.

Employers must post and keep posted a notice of employee rights, where employee notices are customarily posted if they have not already. Please contact us regarding our best practice recommendations for your workplace or with any questions regarding this new ban on captive audiences.

COVID-Era Flexibilities Ending Soon: Form I-9 Remote Inspections

08.08.2023 Written by: Henningson & Snoxell, Ltd.

The Department of Homeland Security and U.S. Immigration and Customs Enforcement have recently announced the “sunset” of COVID-19 temporary flexibilities announced in March 2020 which allowed employers to remotely inspect new employee identification documents required for the Form I-9. These flexibilities began to “sunset” on July 31, 2023, and employers are required to finalize physical inspections by August 30, 2023.

This means that all employers have until the August 30, 2023 deadline to go back and physically inspect the documents the employer received from all individuals hired on or after March 20, 2020, and who only had remote inspections completed by the employer for their Form I-9. DHS requires specific annotations regarding the physical inspections on Form I-9, depending on who completes the physical inspection and what documents are presented.

For more information or questions about this announcement, please contact us.

Legalized Marijuana in the Workplace: What Do Employers Need to Know?

07.06.2023 Written by: Henningson & Snoxell, Ltd.

Legalized Marijuana in the Workplace: What Do Employers Need to Know?

Minnesota has become the 23rd State to legalize recreational marijuana, which goes into effect on August 1, 2023. With this change, employers have a few important steps to take to ensure safety in the workplace for their employees and their business. Here is what employers should know:

Recreational marijuana is still illegal until August 1, 2023; therefore, any use or possession can still be subject to disciplinary action.
After August 1, employers have some restrictions for prohibiting the use or possession of cannabis at work and when they can test for cannabis.

Prohibition on Use or Possession at Work

An employer cannot regulate an employee’s use and possession of recreational marijuana off work premises and during nonworking hours.

Employers can, however, regulate an employee’s use and possession during working hours, on work premises, or while operating an employer’s vehicle, machinery, or equipment.

Additionally, employers have no duty to permit or accommodate the use, possession, impairment, sale, or transfer of cannabis product (etc.) while an employee is working, on work premises, or operating an employer’s vehicle, machinery, or equipment.

Disciplinary Action Allowed

Employers may discipline, discharge, or take other adverse action against an employee for such use if:

As a result of consumption, the employee does not possess the clearness of intellect and control of self that the employee otherwise would have;
Cannabis testing verifies the presence of cannabis product (etc.) following a confirmatory test;

As provided in the employer’s written work rules for cannabis products (etc.), provided the rules are in writing and in a written policy containing the minimum information; or
As otherwise authorized or required under state or federal law, or if failure to do so would cause an employer to lose a monetary or licensing-related benefit under federal law or regulations.

Employers may not discipline, discharge, discriminate against, or request rehabilitation of an employee:

Based on a positive result that has not been verified by a confirmatory test.
Based on a positive result from a confirmatory cannabis test unless:
- Employer has first given the employee an opportunity to participate in a counseling or rehabilitation program; and
- The employee either refused to participate or has failed to successfully complete the program (via withdrawal from program before completion or by positive confirmatory test after completion of program).

Employers may temporarily suspend or transfer an employee to another position (at the same rate of pay) pending the outcome of the confirmatory test, as long as the employer believes it is to be reasonably necessary to protect the health or safety of the employee, co-employees, or the public.

Cannabis Testing for Employees

An employer can test for cannabis when:

The employee works in a “safety-sensitive position.” Such positions are subject to Random Testing.
The employer has a reasonable suspicion that the employee:
Is under the influence of drugs or alcohol;
Has violated the employer’s written work rules prohibiting such use;
Sustained a personal injury or has caused another employee to sustain a personal injury; or
Caused a work-related accident or was operating or helping to operate machinery, equipment or vehicles involved in a work-related accident.
The employee has been referred by employer for substance use disorder treatment or evaluation.

An employer cannot test for cannabis on an arbitrary or capricious basis. In addition, employees have the right to request and receive a copy of the cannabis testing results from the employer.

What You Need to Do

Update written drug and alcohol policies (usage and testing) to explicitly include cannabis language. This statute sets forth specific requirements for your written policy in order that it be compliant. Please contact our offices to ensure your policy reflects such language (some of which includes but is not limited to listing the employees or job applicants subject to testing under the policy, etc.)
Prepare a form detailing the employer’s drug, alcohol, and cannabis testing policy and present it to the employees.

Please contact us before August 1, 2023, to update your drug and alcohol policies to include the necessary cannabis usage and testing language.

We will keep you informed as the Office of Cannabis Management continues to provide additional guidelines over the next year.

How the New Amendments Are Protecting Employees

06.23.2023 Written by: Business Law Department

On July 1, 2023, in addition to the new noncompete legislation, two new amendments will go into effect that will impact employees and businesses. The amendment to the wage disclosure protection will prohibit employers from retaliating against an employee for asserting rights or remedies, and there will be an increase in protection for nursing mothers and employees. Continue reading our blog as we navigate the two new amendments going into effect this year.

Amendment to the Wage Disclosure Protection

Effective July 1, 2023, the Wage Disclosure Protection will prohibit employers from discharging, disciplining, penalizing, interfering with, threatening, restraining, coercing, retaliating, or discriminating against an employee for asserting his or her rights or remedies under the Wage Disclosure Protection.

The Wage Disclosure Protection was enacted in 2014 and amended in 2022. The previous language merely prohibited an employer from retaliating against an employee for asserting rights or remedies under the Protection. The July 1, 2023, amendment clarifies the types of retaliation prohibited under the statute. Contact us regarding these clarifications and what employers need to know.

Increased Protections for Nursing Mothers and Pregnant Employees

Also, effective July 1, 2023, the Minnesota Legislature passed several amendments to the Nursing Mothers and Pregnant Employee laws.

No more 12-month limitation. There is no longer a 12-month limitation for employers to provide reasonable break times each day for lactation. This means that employers must allow nursing mothers and lactating employees breaks each day beyond the 12-month period.
Concurrent with other breaks. Previously, such breaks were required to be taken concurrently with other breaks. However, the new amendment now merely allows for concurrent breaks but does not require the lactation breaks to run concurrently.
Elimination of “unduly disrupts operations.” Employers are no longer allowed to deny nursing mothers and lactating employees a break if the break would ‘unduly disrupt operations.’
Increased protections for pregnancy accommodations without health care provider’s advisement. The new amendment provides increased protections without requiring a licensed health care provider or certified doula for (a) more frequent and longer break periods; (b) a temporary leave of absence; and (c) modification in work schedule or job assignments.
Notice to Employees. Employers are required to inform employees of their rights under this law at the time of hire and when the employee makes an inquiry about or requests parental leave. Notice shall also be provided in the employee handbook, if available, stating the employee rights and remedies. The Department of Labor will make available a suggested text to be included in the notice for employers.

Please contact us to update your employee handbook and answer any questions regarding the new amendment.

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Minnesota Paid Leave Program: Update!

FTC’s Non-Compete Ban is blocked!

Corporate Transparency Act: New Reporting Requirement for Beneficial Ownership Information

Does my company have to report?

What does my company need to report?

When should we report?

What are penalties for non-compliance?

Ban on Asking Applicants and Employees about Pay History

MINNESOTA’S NEW EARNED SICK AND SAFE TIME LAW

What responsibilities do employers have?

Coming Soon: Minnesota Retirement Program

Program Features:

Program Governance: Board of Directors

Note to Employers:

Ban on Captive Audiences

COVID-Era Flexibilities Ending Soon: Form I-9 Remote Inspections

Legalized Marijuana in the Workplace: What Do Employers Need to Know?

Legalized Marijuana in the Workplace: What Do Employers Need to Know?

Prohibition on Use or Possession at Work

Disciplinary Action Allowed

Cannabis Testing for Employees

What You Need to Do

How the New Amendments Are Protecting Employees

Amendment to the Wage Disclosure Protection

Increased Protections for Nursing Mothers and Pregnant Employees