Paid sick leave laws going into effect in Minneapolis, St. Paul
MINNEAPOLIS—The paid sick-leave mandates that go into effect this week in both Minneapolis and St. Paul survived challenges at the state Legislature and a legal fight still under appeal out of Hennepin County District Court.
For employers and employees alike, now comes what may be the biggest hurdle — implementation.
In St. Paul, employers with at least 24 workers are required to offer paid sick leave beginning Saturday. The technical changes range from the mundane to the potentially budget-busting, depending upon who you ask.
"It's like trying to change a tire on a car when the car's moving," said Niles Deneen, owner of Deneen Pottery in St. Paul.
Deneen said he already offers his 85 employees paid time off that's at least as generous as what the city is mandating, but with the help of attorneys, his company had to redraw its approach halfway through the budget season to comply with the city's new accrual and record-keeping requirements.
Andy Remke, who runs the Black Dog Cafe in St. Paul, operates a much smaller business, and his human resources staff is mostly himself and two siblings.
"I'm certainly very sympathetic with people living paycheck-to-paycheck. I've been there myself," said Remke, who is nervously tracking sick-leave accrual on a spreadsheet. "It sort of remains to be seen how much of a burden it's going to be."
When news broke last year that the city of St. Paul would mandate paid sick leave, SuperValu — which operates three Cub Foods stores in St. Paul — came up with a plan early on. The union grocery locations would simply refer to the week of vacation that employees already earn after a year on the job as paid sick leave.
Vacation time, redrafted as paid time off? For the United Food and Commercial Workers union, the approach was a non-starter.
"We objected to it right from the get-go," said Jennifer Christensen, president of UFCW 1189, which represents grocers, nursing home workers and retailers throughout the city. "Our position is these days need to be beyond what they already earn in vacation."
A call to SuperValu was not returned, but Christensen said the grocery chain has since adjusted its plan to make sure it's in compliance with the new city regulations. She expects to have a group meeting with other St. Paul grocers to study any hiccups or misunderstandings around implementation.
"We don't want to see our members have to take out of their vacation for a sick benefit," she said.
Christensen said many of the nursing homes she represents already offered most workers paid sick leave, and adjusting accrual rates to comply with the St. Paul ordinance was more a matter of paperwork than rethinking the wheel.
In other cases, small businesses, employers with a mobile workforce that frequently crosses city boundaries, and companies that had previously revamped or reached the outer limit of the capabilities of their payroll systems face added challenges.
"I know it's fairly expensive to add a new line if your payroll system is maxed out," Christensen said.
Mindee Kastelic, interim CEO and president of the St. Paul Area Chamber of Commerce, said at least one employer — who has declined to be publicly identified — has had to reopen their labor contract with their workers.
"The ordinance is well-intentioned, but a little poorly executed," Kastelic said. "One of the biggest challenges is for the union employers. They may have to go through another round of negotiations if the union doesn't feel they're in compliance ... which is clearly taxing."
St. Paul employers with fewer than 24 employees have until Jan. 1 to implement earned sick and safe leave — paid time off that accrues at the rate of one hour for every 30 hours worked, up to 48 hours per year, for a maximum of 80 hours.
The time off, which can be carried over year to year, can be used to care for oneself or a sick family member, or in the case of domestic abuse or stalking.
Gov. Mark Dayton recently vetoed a "pre-emption" bill sent to him by the Legislature that would have blocked local regulations surrounding sick time.
Changes to the ordinances are still possible, and even likely, given a legal challenge filed in Hennepin County District Court by the Minnesota Chamber of Commerce against the city of Minneapolis.
Until a decision is made in that case, neither city will enforce the rules against employers based outside their municipal boundaries. The Minnesota Court of Appeals will hear the case July 11.
Chad Kulas, executive director of St. Paul's Midway Chamber of Commerce, said some employers who are otherwise open to offering paid sick leave resent the timing of it, which complicates their fiscal year.
"The comment that I heard the most was the grumbling about how some people have to implement this halfway through their year," Kulas said. "It's like, 'Seriously? ... Can't I just do this at the beginning of my next year? It'll be so much easier for us.' "
Deneen, of Deneen Pottery, said his company allowed employees to accrue hours over the course of 12 months and then access paid time off after a year on the job, on top of six paid federal holidays they received from the start.
"We have a paid time off policy that was equal to or more generous than the what the city requires, but the way we accrue the PTO is very different than how the city is doing it," he said.
To come into compliance, "we had to work with our human resources director, and then our employment attorney, and we had to struggle with how to track and accrue (sick-leave hours) to protect ourselves from an audit," Deneen said. "There's a great chance for errors to occur."
In Minneapolis, employers with five or fewer employees must provide sick leave, but it does not have to be paid. No such exemption exists in St. Paul, where even "micro-businesses" will have to come into compliance.
"It's like a forced raise. It's going to have an impact upon us," said Ryan Wilson, who employs three part-time workers at the UPS Store at University and Hamline avenues.
How much of an impact, he said, is hard to tell.
"If my guys need time off, they get it," Wilson said. "It just doesn't happen that often. If they ever asked me to get paid for (sick hours), I definitely did. I let them get paid days off on their birthdays. I'm not mandated to do it. You want to keep your employees happy."
While SuperValu employs hundreds of workers in St. Paul, Remke and his two sisters hire just a couple dozen people to run the Black Dog Cafe in St. Paul's Lowertown neighborhood, and all of them but the chef work part time. Some put in fewer than 15 hours a week, and some are still in high school.
He said the "steady churn of people coming and going" adds to the complexity of record keeping.
Remke said he's sympathetic to the idea of accommodating sick workers, but he's resigned himself to the likelihood that workers in their final days of employment may call in sick to burn off unused time.
One year after a major expansion, the longtime proprietors behind the coffee shop and intimate performance space are eyeing the menu, wondering if they'll have to hike prices to make ends meet.
Hiring a record keeper, or adding pricey new payroll software, would be another hit to an already-strained budget, said Remke, who has yet to walk his staff through all the changes.
"There's a lot more record keeping and keeping track of everyone's hours, initially," Remke said. "This is all kind of new to us. ... How that works out in terms of cost remains to be seen.
"Restaurants in general run on a tight margin," he added. "We're finishing up our first year after an expansion — and we unexpectedly discovered that the first year is really more akin to a restaurant opening, as opposed to having been in business for 20 years, which we have."