Legislative Changes Prompt Policy Review and Updated Training for Minnesota Employers

The Minnesota Legislature passed several laws in 2013 that affect Minnesota employers. Employers should understand these new laws and carefully review existing employment policies — and human resources and management training materials — to ensure compliance with Minnesota law.

Same-Sex Marriage

Effective August 1, 2013, Minnesota law will recognize same-sex marriage. This legislation, along with the United States Supreme Court's decision on June 26, 2013 declaring the definition of "spouse" in the Defense of Marriage Act (DOMA) as unconstitutional, creates several new requirements for Minnesota employers related to same-sex spouses.

FMLA Leave

Employees who reside in Minnesota and are employed by FMLA-covered employers will now be eligible for leave under the Family and Medical Leave Act (FMLA) to care for same-sex spouses. FMLA leave to care for spouses was previously available only to opposite-sex spouses under DOMA. Following the effective date of the new Minnesota law, and as a result of the Supreme Court's DOMA ruling, the definition of "spouse" for FMLA purposes will be as recognized in the state in which an employee resides. FMLA-covered employers with employees who reside in Minnesota should review their FMLA policies to ensure the definition of spouse includes same-sex spouses (at least for employees who reside in Minnesota or other states that recognize same-sex marriage).

Employers should carefully consider how to implement and communicate potential disparities in FMLA eligibility for employees related to the care of same-sex spouses. An employee who is employed in a state that does not recognize same-sex marriage, but who resides in a state which does, would be entitled to FMLA benefits for a same-sex spouse (for example, an employee who resides in Minnesota and is employed in Wisconsin). Likewise, an employee who is employed in a state that does recognize same-sex marriage, but who resides in a state that does not, would not be entitled to FMLA benefits for a same-sex spouses (an employee who resides in Wisconsin and is employed in Minnesota). This distinction may mean employers are required to provide FMLA leave for the care of a same-sex spouse to some employees, but not others.   

If employers decide to exceed the requirements of the FMLA and provide FMLA-type leave for same-sex spouses who reside in states where same-sex marriage is not recognized, such leave to care for a same-sex spouse will likely not count against the 12-week FMLA entitlement and the employee could seek an additional 12 weeks of leave for an FMLA-qualifying event (such as for the care of a child), effectively "double-dipping" on FMLA leave entitlement. Management or human resources professionals who implement and enforce these policies should be made aware of the changes to FMLA policies and trained on applicable practices to implement these changes.

Other Leave and Employment Perquisites

Employers should evaluate their existing policies that may provide certain types of leave or perquisites based also on spousal relationships, such as non-FMLA medical leave, bereavement leave, military leave, employee discounts and tuition reimbursement. On the theory that same-sex domestic partners did not have the option to get married and receive the benefits available to spouse, some employers provided certain benefits only to same-sex domestic partners. This theory no longer holds true for employees residing in states such as Minnesota that will now allow same-sex couples to be married. There is now no justification for treating same-sex domestic partners differently than opposite-sex domestic partners for people residing in states that recognize same-sex marriage. Treating same-sex domestic partners differently may open employers up to sexual orientation discrimination claims.

Discrimination and Harassment

Protection for marital status discrimination under the Minnesota Human Rights Act (MHRA) will now extend to employees or applicants with same-sex spouses. Minnesota law already protected against discrimination based on sexual orientation, so the practical effect of this change on employment policies may not be significant. Nevertheless, employers should review anti-discrimination policies and consider whether any revisions should be made in light of Minnesota's recognition of same-sex marriage. Training for management and human resources professionals should continue to emphasize the importance of prohibiting and preventing discrimination based on protected classifications, which in Minnesota will now include sexual orientation and same-sex marital status.

Employer Consideration of Criminal History

Effective January 1, 2014, Minn. Stat. § 364.021 will be amended to prohibit Minnesota employers from considering or requiring the disclosure of an applicant's criminal history or criminal record until (1) the applicant has been selected for an interview, or (2) if there is no interview, after a conditional offer of employment has been made to the applicant. This restriction (sometimes referred to as the "ban the box" law) does not apply when an employer has a statutory duty to conduct a criminal history investigation. 

In addition to removing any request for criminal history information from employment applications, employer policies and practices regarding the consideration of criminal history information or the procedures for obtaining a background check should be revised to reflect this change in Minnesota law. Hiring personnel should be advised and trained on the appropriate timing of background checks and other investigative actions related to applicants, such as online searches.  

Sick Leave Use

Minn. Stat. § 181.9413 has been amended to expand the use of sick leave for certain family members. Currently, employees are permitted to use sick leave provided by their employer to care for children under the age of 18 (or under the age of 20 who are enrolled in secondary school) on the same terms upon which the employee is able to use sick leave for his or her own illness or injury. Effective August 1, 2013, employers must permit employees to use sick leave to care for their child, adult child, spouse, sibling, parent, grandparent or stepparent on the same terms upon which the employee is able to use sick leave for his or her own illness or injury. 

Employer policies may not limit the amount of an employee's sick leave used to care for the employee's child (including stepchildren). Employers may, however, limit the use of sick leave to care for other family members covered by the new law. This limitation may not prohibit the employee from using less than 160 hours in any 12-month period to care for other family members.

Employers should review existing sick leave policies to ensure the policy permits the use of sick leave for the expanded list of family members and does not impermissibly limit the use of sick leave for the care of such family members.

Whistleblower Protection

Minn. Stat. § 181.931 and 181.932, the Minnesota Whistleblower Act, has historically prohibited 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 their employer, any governmental body or law enforcement official. Effective May 25, 2013, Section 181.932, subd. 3 of the Minnesota Whistleblower Act was amended to include three key terms — "good faith," "penalize" and "report."    

"Good faith" is defined as conduct that does not violate §181.932, subdivision 3, which means that statements or disclosures cannot be knowingly false or in reckless disregard of the truth. "Penalize" means "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." "Report" is "a 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." 

Notably, the Minnesota Whistleblower Act protection has now been extended to employees who in good faith report a "planned violation" of federal or state law or common law or rule, even though that violation has not actually yet occurred. 

These new amendments arguably expand the Minnesota Whistleblower Act to include a wider scope of conduct including reports of violations or suspected violations that have not yet occurred, reports of violations committed by third parties and broadening the definition of penalty to encompass post-termination conduct. Management and human resources professionals should be trained on the new whistleblower protections and the appropriate considerations for discipline and discharge decisions following good faith reports.

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 discharge or at the time the employee quits or resigns. Effective April 30, 2013, both statutes will be amended to clarify that wages 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 amendments further clarify that, if an employee's earned wages and commissions are not promptly paid, the employee may collect the statutory penalty and wages and commissions actually earned and unpaid. The 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 these statutes must be in writing but need not state the precise amount of unpaid wages or commissions. Finally, employers are now also 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."

Based on the potential for increased liability for failure to appropriately pay final wages, employees responsible for processing and providing final paychecks should be trained on the appropriate way in which demands for final paychecks should be handled.

Employer Actions for Complying With New Laws

The changes in Minnesota law present risks for employers who fail to update their policies and practices to conform to the new requirements. To mitigate these risks, employers should take precautions to ensure the enforcement and implementation of updated policies and practices:

1. Review or enact policies and procedures.
   
   Employers should carefully review policies related to the new Minnesota legislation, updating or enacting policies to comply with new requirements (at least for Minnesota employees), including: 
   • Sick leave policies should be revised to provide leave to care for children, adult children, spouses (including same-sex spouses), siblings, parents, grandparents or stepparents 
   • All employment policies (including FMLA policies, other leave policies and employee perquisites) should be updated to reflect a definition of spouse inclusive of same-sex spouses
   • Applications and other recruitment and hiring documents should be updated to reflect that background checks and other considerations of criminal history will occur only during or after an interview (or following a conditional offer in there is no interview)
     
     
2. Train management and human resources professionals.
   
   Management and human resources professionals responsible for implementing and enforcing employment policies should be trained on updated policies and practices. For employers with employees in multiple states, the changes in Minnesota law may make it difficult to have one-size-fits-all employment practices, which can require enhanced training for responsible employees. For example, training should emphasize:
   • The expansion of leaves and perquisites for same-sex spouses
   • The permissible use and tracking of sick leave/paid time off
   • Permissible considerations and timing for collection of criminal history information in the hiring process
   • Permissible considerations in making employment decisions, such as discipline and discharge, and the appropriate documentation for such decision-making
   • Appropriate processes and timing for final wage payments
     
     
3. Communicate with third-party service providers.
   
   Many employers hire third-party service providers to handle certain employment practices, such as payroll, processing of FMLA requests or employee background checks. Employers can be liable for violations of Minnesota law even if the violation was committed by a third-party provider. Employers should confirm with their service providers that appropriate changes are in place to comply with new requirements of Minnesota law.  
     
4. Consult legal counsel
   
   Employers who have any questions or concerns about the impact of new Minnesota laws on their business should consult with legal counsel.