Articles

Chris Virta

Legislative Changes Affecting Business

With the Eighty-eighth Minnesota State Legislature adjourned until February 25, 2014, now is a good time to look back at some of the legislative changes from 2013 affecting businesses in Minnesota.

Recovery of Unpaid Wages

The Minnesota Supreme Court ruled in September of 2012, in Caldas v. Affordable Granite Stone, that the laws that give workers the right to make claims for unpaid wages were unclear.  This prompted legislation in 2013 amending Minnesota Statutes, Sections 181.13 and 181.14 to define wages “actually earned and unpaid” at the time of an employee’s discharge or resignation.  Under the amendment, effective April 30, 2013, “[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.” A former employee seeking unpaid wages is required to make their demand for payment in writing, although the law states that they do not need to list the precise amount of unpaid wages or commissions.  Often, the exact amount would not be known by the former employee.

An additional change made to Minnesota Statutes, Section 181.14 relates to deductions from the final wages of employees entrusted with property or money.  Under the new law, employers are 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 section181.79.”

Employers should make sure those responsible for processing and providing final paychecks are trained on the appropriate way to handle demands for final paychecks.

Sick Leave

Under a new law that went into effect on August 1, 2013, employees may now use sick leave to care for an ailing relative.  Under the previous law, sick leave was limited to use for personal illness or for the illness of the employee’s child under the age of 18 (or under the age of 20 if attending secondary school).  The amended Minnesota Statute, Section 181.9413, now allows employees to use sick leave to care for an adult child, spouse, sibling, parent, grandparent or stepparent.  The statute allows employers to limit the amount of sick leave used to care for family members now covered under the new law to no less than 160 hours in a 12-month period.  This limitation does not apply to personal illness or sick leave used to care for a child.

Employers should review their policies on sick leave to ensure that the use of sick leave for the expanded list of family members now covered under the law is permitted and that its use is not restricted more than what is statutorily allowed.

Workers’ Compensation

Effective October 10, 2013, a diagnosis of post traumatic stress disorder (PTSD) by a licensed psychiatrist or psychologist has been added to the list of covered occupational diseases under the Minnesota Workers’ Compensation Act.  The extension of coverage for PTSD marks the first time Minnesota’s workers’ compensation law covers “mental-only” injuries.  The new law explicitly excludes coverage for PTSD mental impairment resulting from a disciplinary action, job transfer, layoff, demotion, promotion, termination, retirement, or similar action taken in good faith by the employer.

Employment Applications

Under a new law, effective January 1, 2014, private employers will not be allowed to inquire about criminal history or background on an employment application.  This restriction has been in place for public employers since 2009.  Under the new law, found in Minnesota Statutes, Section 364.021, employers must wait until the applicant has been selected for an interview before inquiring about an applicant’s criminal history.  For positions that do not include an interview as part of the hiring process, the new law states that employers must wait until there is a conditional offer of employment before asking questions regarding criminal history.  This restriction does not apply to employers that are required by statute to undertake a criminal background investigation. 

Employers who violate the new law within the first year will be subject to a written warning from the commissioner of human rights that will also include a notice regarding the penalty for any subsequent violations. 

Employers should remove any request for criminal history information from their employment applications and should also review their policies and procedures for obtaining a background check to reflect this change to Minnesota law.

Minimum Wage

No changes were made in 2013 to Minnesota’s minimum wage.  The Minnesota House of Representatives and Senate, however, approved separate increases to the minimum wage, but were unable to agree on the details of a final bill before the legislative session ended.  The version approved by the Minnesota House of Representatives sought to raise the minimum wage to $9.50-by August of 2015, whereas the Senate approved a plan to raise the minimum wage to $7.50.  The topic of raising the minimum wage will likely be revisited by the Minnesota Legislature in 2014.

 

Christopher J. Virta is an attorney at Fryberger, Buchanan, Smith & Frederick, P.A., practicing in the areas of corporate, municipal law and finance.