On October 3, 2019, the Duluth City Council updated its administrative rules relating to Ordinance No. 10571, which the council adopted on May 30, 2018, and which takes effect on January 1, 2020. The ordinance requires private employers to provide paid sick and safe leave to employees.

The new administrative rules clarify some of the language in the ordinance. As discussed in the June 12, 2018, Compliance Corner article on the law, the Duluth city ordinance requires private employers with at least five employees to provide employees with one hour of paid leave off for every 50 hours on the job, for up to 64 leave hours a year for employees that: 1) work in Duluth more than 50% of their working time in a 12-month period; or 2) are based in Duluth, spend a substantial part of time working in Duluth, and don't spend more than 50% of work time in a 12-month period in any other particular place.

The rules clarify that a “substantial part of time” means more than 50% of work time. The rules also clarify that commuting to work, as well as time worked at home, counts as hours worked in Duluth.

In addition to these clarifications, the rules create a six-factor test to determine whether a worker is an employee (who is eligible) or an intern (who is not eligible) and defines seasonal employee. They also expand on the ordinance’s treatment of substantially equivalent leave policies maintained by employers, including non-traditional paid leave policies such as unlimited leave.

The rules go on to formalize existing FAQ postings by the city concerning the accrual of sick and safe time while a worker works overtime, or takes vacation time or sick and safe time. The rules also provide more detail on how employers provide notice of the ordinance, as well as procedures a worker should follow when requesting sick and safe leave or when they notify the employer that they are taking the leave, including appropriate supporting documentation.

In addition, the rules state violations may incur administrative penalties or the suspension or revocation of city-issued licenses. Finally, the rules state that the leave can run concurrently with other state or federal leave law, such as FMLA.

Since the effective date for the ordinance is fast-approaching, employers should make sure that their leave policies reflect this new guidance.

City of Duluth Administrative Rules »

On May 19, 2018, Gov. Dayton signed HF 3196 into law, creating Chapter 162. This bill adds new provisions relating to step therapy for prescription drugs.

As background, step therapy involves protocols or programs that establish a specific order in which prescription drugs are prescribed. This bill requires plans that cover prescription drugs through step therapy to allow participants and their practitioners to request step therapy override exceptions. Specifically, the participant must be allowed to request, in writing, that step therapy be overridden in a particular situation where immediate coverage of prescription drugs would be more medically appropriate. The override exception requests must be granted if the plan participant previously received step therapy that was ineffective or caused a diminished effect or adverse event.

This law is effective Jan. 1, 2019.

Chapter 162 »

On May 30, 2018, the Duluth City Council adopted Ordinance No. 10571, which requires private employers to provide paid sick and safe leave to employees. The ordinance takes effect on Jan. 1, 2020, and Duluth joins Minneapolis and St. Paul to become the third city in Minnesota to enact a paid sick and safe time law.

The Duluth city ordinance requires private employers with at least five employees to provide employees with one hour of paid leave off for every 50 hours on the job, for up to 64 leave hours a year for employees that: (i) work in Duluth more than 50 percent of their working time in a 12-month period; or (ii) are based in Duluth, spend a substantial part of time working in Duluth, and don't spend more than 50 percent of work time in a 12-month period in any other particular place. The Duluth ordinance applies to an employer regardless of whether the employer is actually physically located in the city. Once the law goes into effect, employees may use accrued leave for sick and safe time purposes after 90 calendar days of employment. Employers are only required to allow an employee to carry over 40 hours of leave into the following year.

Covered sick time purposes include a mental or physical illness, injury, or health condition, medical diagnosis, care, or treatment of the same, and preventive medical care. For safe time purposes, leave may be used to provide or receive assistance for domestic abuse, sexual assault or stalking of an employee or family member. Employers that have existing paid leave policies that provide an amount of paid leave that is at least as beneficial in the way that it may be used and under the same conditions (including the law's accrual and carry-over requirements) as the Ordinance aren't required to provide additional sick time.

Once the law takes effect, employers must notify employees that they're entitled to earn sick and safe time, the amount thereof and the terms of its use under the law. In addition, employers must keep records documenting hours worked as well as leave accrued and used.

As for takeaways for employers, the law doesn't take effect until 2020, so employers don't need to worry too much about this ordinance at this point. The law does include notification and record-keeping requirements, so employers should be mindful of upcoming compliance requirements. Additional guidance will likely be forthcoming. Ultimately, employers that have employees in Duluth will want to work with outside counsel to incorporate the new Ordinance's requirements into their overall leave policy.

Duluth, Minnesota Ordinance No. 10571 »

In the Feb. 7, 2017, edition of Compliance Corner we reported that the Hennepin County District Court issued an order denying a broad injunction of the recently enacted Minneapolis Sick Leave and Safe Time Ordinance (Ordinance 2016-040, covered in the Nov. 1, 2016, and June 14, 2016, editions of Compliance Corner). The district court found that the city had the authority to enact the ordinance, but granted a temporary injunction preventing its application to employers that are not located in the City of Minneapolis.

After the district court’s ruling, many questions remained. On Sept. 18, 2017, some of those questions were answered by the Minnesota Court of Appeals, which affirmed the Hennepin County District Court’s ruling. So now, the City of Minneapolis can proceed with the ordinance, which took effect on July 1, 2017. If they have not done so already, employers in the City of Minneapolis and with employees in Minneapolis should plan for immediate implementation of the ordinance.

It is important to note that the ordinance has somewhat of a delayed enforcement provision, which provides that during the first year and for first violations, employers will not face penalties for failing to adhere to the ordinance, but they will be issued warnings and notices. Subsequent violations may lead to penalties.

Minneapolis employers should work closely with outside counsel in developing their leave policies to appropriately implement the ordinance requirements.

Minnesota Chamber of Commerce et al. v. City of Minneapolis »

On May 12, 2017, Gov. Dayton signed SB 997 into law. This law requires plans that provide coverage for prescription eye drops to also provide coverage for prescription eye drop refills if certain conditions are met.

This law is effective Jan. 1, 2018.

SB 997 »

On Jan. 19, 2017, Hennepin County District Judge Dickstein issued an order denying a broad injunction of the recently-enacted Minneapolis Sick Leave and Safe Time Ordinance (Ordinance 2016-040, covered in the Nov. 1, 2016, and June 14, 2016, editions of Compliance Corner). The district court found that the city had authority to enact the ordinance, but granted a temporary injunction preventing its application to employers that are not located in the City of Minneapolis. The district court intends to hold a final hearing in this case prior to the July 1, 2017, effective date of the ordinance.

So, the ordinance is still currently scheduled to take effect on July 1, 2017. City officials are trying to determine the scope of the ruling and clarify the ordinance’s application. Employers in the City of Minneapolis and with employees in Minneapolis, should plan for implementation of the ordinance on July 1, 2017.

It is important to note that the ordinance has somewhat of a delayed enforcement provision, which provides that during the first year and for first violations, employers will not face penalties for failing to adhere to the ordinance, but they will be issued warnings and notices. Subsequent violations may lead to penalties.

After the district court’s ruling many questions remain and we will report on any further developments in Compliance Corner. Minneapolis employers should work closely with outside counsel in developing their leave policies to appropriately implement the ordinance requirements.

Minnesota Chamber of Commerce et al. v. City of Minneapolis »

On Nov. 24, 2015, the Minnesota Department of Insurance published Administrative Bulletin 2015-5, which relates to gender identity nondiscrimination requirements. The purpose of the bulletin is to advise insurers delivering or issuing policies in Minnesota that discrimination against an individual because of that individual’s gender identity or expression is prohibited. According to the bulletin, the prohibition extends to the availability of health insurance coverage and the provision of health insurance benefits. The bulletin restates Minnesota law to prohibit discrimination in any business practice (including insurance) that allows discrimination based on protected classes, which includes gender and sexual orientation. The department will disapprove policy forms if there are exclusions based on coverage for medically necessary treatment for gender dysphoria and related conditions, including gender confirmation surgery (previously known as sex reassignment surgery). Lastly, the bulletin contains contact information for related questions. Although the bulletin contains no new compliance requirements for employers, they should be aware of the prohibition on discrimination.

Administrative Bulletin 2015-5 »

On Oct. 22, 2015, the Minnesota Department of Commerce published a letter relating to the PACE Act. According to the letter, as a result of the PACE Act, Minnesota’s definition of “small group employer” will remain an employer with at least one but no more than 50 employees for plan years that begin on or after Jan. 1, 2016. The bulletin also includes processes for carriers to update their 2016 plan year rates and communicate those updates to the Department. Minnesota employers in the 51-100 group should work with their carriers concerning next steps with regard to the change in definition.

Minnesota Letter »

On Sept. 29, 2015, the Minnesota Insurance Division published Administrative Bulletin 2015-4. The new bulletin relates to employee counting methods in the small group health insurance market in Minnesota. Specifically, the bulletin states that health insurance companies in Minnesota may use one of two methods for counting employees. The first is found in the SHOP regulations (45 CFR 155.20), and the second is found in Minnesota insurance law. Under the SHOP regulations, the method is the same as under the employer mandate—it includes full-time equivalents and is measured using the preceding calendar year. Under Minnesota insurance law, an ‘employee’ means an individual employed for at least 20 hours per week, but does not include temporary, seasonal or substitute employees. Minnesota defines a ‘small employer’ as one that employs between one and 50 on business days during the preceding calendar year.

Administrative Bulletin 2015-4 »