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.

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!

Employer Rights & U.S. Immigration and Customs Enforcement (ICE)

02.26.2025 Written by: Henningson & Snoxell, Ltd.

When U.S. Immigration and Customs Enforcement (ICE) conducts a workplace visit, both the federal agents and the business owners have obligations to ensure that proper law enforcement procedures and business protections are respected. ICE officers must present their credentials, which employers have the right to examine, along with any warrants. While ICE officers may freely enter any “public area” of the business (such as lobbies or parking lots), access to “private areas” (like employee offices or break rooms) requires either employer consent or a judicial warrant signed by a judge. It is crucial to understand that administrative warrants (Form I-200 or I-205) require employer consent for entry into private areas, while judicial warrants provide broader authority.

The interaction between businesses and ICE involves established protocols that balance law enforcement objectives with business operations. The employer has the right to have a business representative present during any employee interviews and the right to contact legal counsel. For Form I-9 Audits, ICE must provide prior notification, and employers have three (3) days to produce the forms. If unauthorized employees are identified during an audit, employers have ten (10) days to become compliant. Throughout any ICE visit, both parties should maintain documentation of the interaction. Business owners should understand that they may exercise their rights while also complying with valid legal obligations, ensuring both proper law enforcement procedures and business protections are respected.

We encourage you to contact us regarding any questions or concerns you may have related to this topic. H&S is here to help you and your business comply with your legal obligations. If an employee requires legal assistance related to an ICE workplace visit, please seek legal assistance from an immigration attorney. If you do not know of one or would like a recommendation, please contact us for a referral.

Looking to hire? Make sure your job posting complies with new MN law.

01.08.2025 Written by: Henningson & Snoxell, Ltd.

Effective January 1, 2025, Minnesota employers with 30 or more employees must include wage ranges and descriptions of any benefits that may be offered, including but not limited to health or retirement benefits, in any job postings, including those posted on Indeed, internally, or through a third-party recruiting agency. The wage range should be a “good faith estimate” of the minimum and maximum annual salary or hourly wage range for the posted position. If the wage range is unknown, employers will still need to list the fixed pay rate for the job. However, the salary range cannot be open-ended. Feel free to contact us to review your job postings before you post to ensure compliance.

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!

FTC’s Non-Compete Ban is blocked!

09.16.2024 Written by: Henningson & Snoxell, Ltd.

The Federal Trade Commission (FTC) published a final rule banning nearly all non-compete agreements, nationwide, on May 7, 2024, to be effective September 4, 2024. However, a recent lawsuit in the United States District Court for the Eastern District of Texas challenged the final rule’s lawfulness. On August 20, 2024, the Court held that the FTC’s non-compete rule was unlawful, and that the FTC lacks any substantive rule making authority with respect to unfair methods of competition. As such, the rule was blocked and non-compete agreements are still available to the extent allowable under Minnesota noncompete law.

Appeals by the FTC from this ruling are expected. Such appeals would be heard by the Fifth Circuit Court of Appeals and possibly even the U.S. Supreme Court, both of which have issued recent decisions reducing the power of federal agencies.

H&S is here to assist you with your questions and concerns regarding non-compete agreements. Give us a call to learn how we can help you continue to protect your business interests.

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.

Coming Soon: Minnesota Retirement Program

10.05.2023 Written by: Henningson & Snoxell, Ltd.

The Minnesota Secure Choice Retirement Program Act (the “Program”) establishes a retirement savings program available to state residents employed by covered employers (those with five or more employees who do not already have a retirement program in place). Under the Program, individual retirement accounts (IRAs) will be established for eligible employees to fund with a portion of their paycheck.

Program Features:

Participation in the Program is mandatory for employers that do not currently sponsor their own workforce retirement savings plan, such as a 401(k) plan, or those who have not sponsored one in the 12 months prior to the “Mandatory Implementation” date.
Employers are not required to contribute to their employees’ retirement plan.
“Covered Employees” include any employee of a covered employer who is at least 18 years old and satisfies any other criteria that may be established by the Program’s Board of Directors.
Employees can:
- elect whether their contributions will be pre-tax or post-tax (Roth)
- change their contribution rate
- opt out of participation entirely
Employers must provide Program Information to all covered employees (the Program Information required has not yet been made available by the State).
Annual limits on contributions to an account under this Program will mirror the Federal IRA limits which are subject to annual adjustments. For 2023, these limits are $6,500 for individuals under the age of 50 and $7,500 for individuals over the age of 50.
The Program is set to begin on or after January 1, 2025. The Board of Directors will meet on March 1, 2024, to establish administrative procedures for the Program.

Program Governance: Board of Directors

The Program will be administered by a Board of Directors comprised of seven (7) members: the executive director of the Minnesota State Retirement System; the executive director of the State Board of Investment; three (3) members chosen by the Legislative Commission on Pensions and Retirement with retirement plan expertise; one (1) private-sector member (appointed by the Governor) with plan administration experience; and one (1) small business owner (appointed by the Governor).

Note to Employers:

This means additional requirements for you including, but not limited to, withholding contributions from payroll, remitting the withheld contributions to the program, ensuring all necessary information is provided to employees, etc. So, be sure to pay close attention when this Program becomes effective as civil penalties will be imposed for compliance failures.

We do our best to keep employers updated so that you can make informed decisions as you operate your business. For now, there is no requirement that you implement anything. But if you have any questions or concerns about this Program and what it may mean for your business, please feel free to reach out. A member of our team would be happy to guide you through this change.

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