Earned Sick and Safe Time Amendment

04.10.2025 Written by: Henningson & Snoxell, Ltd.

As of January 1, 2025, the Earned Sick and Safe Time (ESST) statute has been amended with new requirements for additional paid leave. When employers offer paid time off (PTO) or other paid leave beyond the minimum ESST hours required by law, this additional leave must comply with all ESST statutory requirements (except for accrual requirements) whenever it is used for ESST-qualifying purposes.

For example, if the employer offers 25 hours of PTO in addition to the minimum requirement of 48 hours per year under ESST law, the employer must provide the same notice, documentation, anti-retaliation, replacement workers, etc. as required under ESST if the additional PTO hours are used for an ESST-qualifying purpose. In other words, whenever an employee uses PTO for an ESST-qualifying purpose, the employer must follow the ESST rules regarding notice, documentation, anti-retaliation, replacement workers, etc. Please contact us if you have any questions about the new amendment.

Update: FinCEN’s Interim Final Rule for BOI Reporting Requirements

04.09.2025 Written by: Henningson & Snoxell, Ltd.

Financial Crimes Enforcement Network (FinCEN) announced its interim final ruling regarding the Beneficial Ownership Information (BOI) reporting requirements Friday evening, March 21, 2025. The interim final ruling provides that entities created in the U.S., and their beneficial owners, are exempt from the BOI reporting requirement. Foreign entities, i.e., entities formed outside of the U.S., are still required to file their BOI report within the applicable timeframe, but U.S. persons who are beneficial owners of a foreign entity are not required to be reported as beneficial owners.

This means that entities formed in the state of Minnesota or any other U.S. state are exempt from filing the initial BOI report and no longer have the continuing obligation to file updated BOI reports. As with many of the BOI updates to this point, this is subject to changes that may occur in the final ruling.

Please contact us if you have questions.

Minnesota Paid Leave Update: Premium Rates

03.24.2025 Written by: Henningson & Snoxell, Ltd.

Two parents and their baby benefitting from MN Paid Leave.

The Minnesota Paid Family and Medical Leave, effective January 1, 2026, provides paid time off for qualifying employees to take care of themselves or their families, for certain military-related events, or certain personal safety issues (“Paid Leave Program”). Family Leave provides payments and job protection for 1-12 weeks for (a) bonding with a new child, (b) caring for a loved one, (c) managing military leave, and (d) certain personal safety issues. Medical Leave provides payments and job protection for 1-12 weeks for an employee’s own serious health condition. However, the employee can only take a maximum of 20 weeks combined under the Paid Leave Program in one (1) year if the employee qualifies for both medical and family leave.

The Paid Leave Program is funded by both employers and employees by contributing premiums to the Paid Leave Program fund. The premium rate is the percentage of an employee’s wage reported each quarter that will be collected and paid to the Paid Leave Program fund. For most employers, the premium rate is 0.88 percent for 2026. For employers who employ thirty (30) or fewer people and the average employee wage is less than 150% of the statewide average weekly wage (less than $2,058 weekly and approximately $105,000 annually), the premium rate for the first year of the program is 0.66 percent of wages, of which two-thirds (2/3) or (0.44%) may be charged to the employee (“Small Employer”).

Employers must pay at least 0.44% (or 0.22% if a Small Employer) of the premium rate but may choose to pay up to 100% of the premium for their employees. The remaining 0.44% or the remaining amount not paid by the employer shall be deducted from the employee’s pay. The first premium payment is due April 30, 2026, based on the wage detail report from January 1, 2026, to March 31, 2026. Employers may deduct the employee’s portion of the Paid Leave premium from their paychecks beginning January 1, 2026. Moving forward, premium rates will be set annually by July 31 for the following year; however, the premium rate will not exceed the maximum rate set by state law (1.2%). To calculate an estimate of your Minnesota Paid Leave premium contribution, visit: https://info.paidleave.mn.gov/employers/premiums/index.jsp.

When an employee wants to use the benefits of the Paid Leave Program, the employee must apply to the Minnesota Paid Leave Program, which will process their claim and pay benefits out of the state fund. The fund pays a wage replacement rate, which is a percentage of the employee’s income on a progressive scale (i.e., lower-income workers receive a higher percentage of their income, and as the employee earns more, the percentage will decrease). However, benefits will be capped at the state average weekly wage (SAWW), which as of October 1, 2024, was $1,372.00 per week (adjusted annually). The employee has 12 months from the first date of absence under the Paid Leave Program to use the Leave time. If the employee does not use the full 20 weeks of absence in a benefit year, the employee does not get to carry over any unused time or receive any money for the unused time. In the new year, the benefits will renew, and the employee will again have up to 20 weeks of benefits available. In the upcoming months, the Minnesota Department of Employment and Economic Development (DEED) will be releasing an estimated benefits calculator similar to the one at the link above.

We encourage you to begin planning, if you have not already, for this obligation to ensure your business is financially and administratively prepared. Please contact us if you have any questions regarding the Minnesota Paid Leave.

Stay tuned for more information and blogs about Minnesota Paid Leave!

The Whirlwind of BOI Reporting & Recent Updates

03.05.2025 Written by: Henningson & Snoxell, Ltd.

As business owners, you are most likely aware that the Corporate Transparency Act (CTA) requires most businesses to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN) to help find and stop illicit financing and increase transparency.

To help you understand the whirlwind of BOI reporting requirements, here is a brief outline of the recent BOI updates:

December 3, 2024: a nationwide preliminary injunction issued on CTA and BOI reporting requirements.
December 23, 2024: a nationwide preliminary injunction lifted pending U.S. Department of Treasury’s appeal.
December 26, 2024: a nationwide preliminary injunction put back in place.
January 7, 2025: a Texas District Court issued an order pausing the CTA enforcement.
January 23, 2025: the U.S. Supreme Court lifted one of the nationwide preliminary injunctions.
February 18, 2025: the second and remaining nationwide preliminary injunction has been lifted, making the CTA and BOI reporting requirements mandatory again.

As of this blog, the CTA and BOI reporting requirements are back in effect and reporting companies must comply to avoid severe penalties. Failure to timely file may result in civil penalties of $591 per day (adjusted annually for inflation), with a maximum penalty of $10,000.00 or criminal penalties of up to two (2) years imprisonment or a $10,000.00 fine.

Filing Deadlines**

For reporting companies formed or registered on or before February 19, 2025, BOI reports must be filed by March 21, 2025.
For reporting companies formed or registered after February 19, 2025, BOI reports must be filed within thirty (30) days of the formation or registration date.
If there is a change in ownership information or company information, you must file an updated BOI report within thirty (30) days of the change.

**If your reporting company received an extension, such as the disaster relief extension, the reporting company has until the applicable extension date, rather than the general deadlines.

**If you are a tax-exempt organization that has received a determination letter to that effect, you are exempt from this reporting requirement. Furthermore, if you are an organization that is presumed to be tax-exempt and as such has received no determination letter, you will also be exempt from the reporting requirement IF your Articles of Incorporation contain the appropriate clauses required by the IRS.

Please use the following link to file your BOI report: https://www.fincen.gov/boi. We encourage you to contact us if you have any questions regarding the CTA or BOI reporting requirements.

Opportunity for STEM Businesses: Internship Funding Assistance

02.18.2025 Written by: Henningson & Snoxell, Ltd.

SciTech Internship Program offers Minnesota science, technology, engineering, and math (STEM) employers a grant of up to $2,500.00 to provide college students opportunities to gain experience in the STEM industries. Employers can receive a wage match for up to fifty percent (50%) of the intern’s wages ($2,500 max) when they hire an intern through the SciTech Internship Program.

SciTech Internship Program is a state-funded program that assists small to mid-sized Minnesota STEM companies that provide paid internships for college students in STEM disciplines. Eligible employers must have 250 employees or fewer, be a for-profit business registered in Minnesota, and offer a paid STEM internship. Grants are limited and require the internship to be posted on scitechmn.org to receive the grant.

Henningson & Snoxell is here to help your business succeed by providing insightful legal advice and informing you of opportunities that may help your business grow. Contact us to help your business reach its fullest potential.

New MN ‘Junk Fees’ Law: Transparency for Consumers

12.19.2024 Written by: Henningson & Snoxell, Ltd.

Effective January 1, 2025, individuals and businesses must include all mandatory fees or surcharges in the advertisement, display, and offer of a price for any goods or services. This Minnesota law requires any fees or surcharges that (1) must be paid in order to purchase the goods or services being advertised, (2) are not reasonably avoidable by the consumer (e.g., late fees for equipment rentals, charges for smoking in a hotel room, or credit card surcharges), or (3) a reasonable person would expect to be included in the purchase of the goods or services being advertised, to be included in the advertised, displayed, and offered price of goods or services.

The law includes specific obligations for services where the total amount is based on consumer selections and preferences, online retailers, goods and services offered by auction, and food and beverage establishments.

**What fees and surcharges are not required to be included in the total price?**

Government-imposed taxes, e.g., sales tax.
Fees authorized by law and related to the purchase or lease of a motor vehicle charged by the motor vehicle dealer.
Businesses or affiliates regulated by the Minnesota Public Utilities Commission.
Fees, surcharges, or other costs associated with real estate settlement services, excluding real estate broker commissions and fees.

Penalties for Noncompliance

Failure to comply may result in an investigation into your business’s practices by the Attorney General, civil penalties of up to $25,000 per violation, and costs and disbursements, including costs of investigation and any reasonable attorneys’ fees.

What do you need to do before January 1, 2025?

Determine whether and how this new law applies to you and your business.
Adjust your pricing strategy to be compliant.
Update any pricing offers, advertisements, or displays.

If you are unsure whether or how this new law applies to you, contact us to help you become compliant before January 1, 2025.

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!

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.

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