On May 27, 2016, the Minneapolis City Council passed the “Sick and Safe Time” Ordinance. Prior to its passing, several amendments were incorporated into the ordinance. The final ordinance, as amended, is available here.

Here are the key points that employers should know about the final ordinance:

When will the paid sick leave ordinance take effect? The effective date of the ordinance will be July 1, 2017.

What employers will be subject to the ordinance? The ordinance will apply to all employers. For employers with 5 or less employees, the sick and safe leave required by the ordinance may be unpaid. For employers with 6 or more employees, the sick and safe leave required by the ordinance must be paid. For established businesses, the number of employees will be determined based on the average number of employees during the previous year. For new businesses, the number of employees will be determined based on the average number of employees during the first 90 days after the business’s first employee begins to work.

Is there an exception for new businesses? During the first 5 years after the ordinance goes into effect, new businesses (other than chain establishments) will only be required to provide unpaid sick and safe leave during their first 12 months after the hire date of the employer’s first employee, but will not be required to provide paid sick and safe leave during that time. This exception does not apply to “chain establishments,” which is defined to include any establishment doing business under the same trade name used by two or more establishments, or under the same ownership and doing the same business, whether such other establishments are located in the city or elsewhere and regardless of the type of ownership of each individual establishment.

What employees will be covered by the ordinance? Any employee (exempt, non-exempt, part-time, or temporary) who performs work for an employer within the geographic boundaries of the City of Minneapolis for at least 80 hours in a year will be covered by the ordinance. To administer this requirement, the ordinance will require that employers with employees who occasionally work in Minneapolis must track and keep records of the hours that those employees work within the City. The ordinance will not apply to independent contractors. For the construction industry, the ordinance states that employers can satisfy the ordinance by paying employees the required prevailing wage or apprentice wages. For health care employees (such as doctors, nurses, and emergency room personnel) who are paid at least four times the federal minimum wage, sick and safe leave may only be used when the employee is scheduled to work.

How much sick and safe leave will the ordinance require? The ordinance will require that employees must accrue a minimum of one hour of sick and safe leave for every 30 hours worked, up to a maximum of 48 hours in a calendar or fiscal year. Employees may carry over unused sick leave from year to year, but may not accrue more than a total of 80 hours of sick and safe leave unless the employer agrees to a higher amount. The sick leave begins to accrue at the beginning of an employee’s employment (or July 1, 2017 when the ordinance will take effect), but it may not be used until 90 calendar days after the commencement of employment.

When can employees use sick and safe leave? Employees may use sick and safe leave for a variety of reasons, including but not limited to: (i) an employee’s health condition or need for treatment or preventive care; (ii) the care of a family member with a health condition or who requires treatment or preventive care; (iii) absences due to the domestic abuse, sexual assault, or stalking of the employee or an employee’s family member; (iv) the closure of a business by a public official due to a health issue; (v) the closure of the school of an employee’s family member’s school or place of care by a public official due to a health issue; or (vi) the closure of the school of an employee’s family member’s school or place of care due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected closure. The ordinance will prohibit employers from retaliating against employees for the use of sick and safe leave.

Can employers require advance notice or documentation for sick and safe leave? For foreseeable leave, an employer can require up to seven days advance notice of the need to use paid sick leave. For unforeseeable leave, the employer can require the employee to provide notice as soon as practicable. The employer may require reasonable documentation of the need for paid sick leave only if paid sick leave is used for an absence of more than three consecutive days.

How will the ordinance be enforced? The ordinance will be enforced by the Minneapolis Department of Civil Rights. An employee may report a violation to the Department within one year of its occurrence. After receiving a report, the Department will investigate and determine whether a violation occurred. During the investigation, the employer will have the opportunity to provide a written position statement in response to the alleged violation. If the Department determines that a violation occurred, the employer will have a right to appeal by requesting a hearing with an administrative hearing officer within 21 days. After that, the employer may seek a writ of certiorari to appeal the matter to the Minnesota Court of Appeals. The Department of Civil Rights may also refer the matter to the Minneapolis City Attorney, who can seek to enforce the ordinance through a civil lawsuit in district court.

What are the potential penalties for violations? During the first 12 months after the ordinance takes effect, the Department of Civil Rights will only have authority to mediate disputes, issue warnings, and issue notices to correct. After the first 12 months, the Department will be able to impose the following forms of relief and penalties: (i) reinstatement and back pay; (ii) crediting of sick time accrued but not credited plus payment for that sick time multiplied by two, or $250, whichever is greater; (iii) payment of sick pay unlawfully withheld plus payment for that sick time multiplied by two, or $250, whichever is greater; (iv) a $1,500 administrative penalty payable to the employee; or (v) an administrative fine payable to the City of up to $50.00 for each day during which the violation continued following written notice to the employer of the violation with a period of no less than 5 business days to comply.

What notice requirements will apply? The ordinance will require employers to post a notice of employee rights relating to paid sick leave in the workplace. The notice will be developed and published by the Department of Civil Rights. Employers who provide employee handbooks also must include in their handbooks a notice of employee rights and remedies under the ordinance. In addition, each time an employer pays wages to an employee, the employer must provide a written statement to the employee regarding the amount paid sick leave available to them and the amount of paid sick leave that they have used. The employer can include this information on a pay stub or may develop an online system for employees to access the information.

What recordkeeping requirements will apply? Employers will be required to maintain accurate records of accrued and used paid sick leave and must allow an employee to inspect the records relating to that employee at a reasonable time and place. In addition, an employer with employees who occasionally perform work within the City of Minneapolis will need to track hours worked in the City by each employee to determine whether they are covered by the ordinance.

Will paid sick leave need to be paid out to terminated employees? No. The ordinance does not require employers to pay terminated employees for accrued, but unused paid sick leave.