New Year Brings New Minnesota Requirements for Employers
As noted in Taft’s prior coverage of the 2024 Minnesota Legislative Session, there are a number of laws slated to take effect on Jan. 1, 2025. Several of these laws warrant consideration and, in some cases, changes to employee compensation, benefits, policies, and practices.
Minnesota Secure Choice Retirement Program
The Minnesota legislature enacted the Minnesota Secure Choice Retirement Program in 2023 and further modified the requirements in the 2024 session. Under the law, an employer doing business in Minnesota is required to enroll its employees in the state administered retirement plan and begin payroll deductions for transmittal if the employer: (1) does not offer a retirement plan to its employees; and (2) has five or more employees. Payroll deductions will be deposited in an IRA in the name of each employee and invested with oversight by the State Board of Investment. This new requirement was slated to begin on Jan. 1, 2025. However, the Minnesota Legislative Commission on Pensions and Retirement recently issued an update stating that the Secure Choice Retirement Program will not be ready for enrollment until “mid- to late-2025.” Employers can track updates issued on the Minnesota legislature’s website, which is linked here.
FLSA Salary Thresholds
Effective Jan. 1, 2025, the salary threshold under the federal Fair Labor Standards Act (FLSA) will increase to $1,128 per week, $58,656 annually, for executive, administrative, and professional exemptions. This is a significant increase from the current salary threshold of $43,888 annually. Employers can reclassify employees making less than $58,656 annually to non-exempt or provide salary increases.
Pay Transparency
Employers with 30 or more employees at one or more sites in Minnesota must disclose applicable salaries and benefits in each job posting or advertisement on Jan. 1, 2025. The new law prohibits open-ended salary ranges and also requires a “general description of all of the benefits and other compensation, including but not limited to any health or retirement benefits” offered.
ESST Changes
As of Jan. 1, 2025, the same Minnesota Earned Sick and Safe Time (ESST) rules and protections will apply to any allotments of paid time off (PTO) when the time is used for an ESST-eligible purpose. This change is significant as many employers carefully crafted attendance policies to impose discipline once an employee used their ESST balance, regardless of whether the employee had other forms of PTO available. Further, most PTO policies expressly differentiate ESST advance notice and documentation requirements from vacation and/or PTO requirements. Aside from the exceptions provided in the statute, most PTO policies and practices will need to adhere to the ESST rules and protections when employees use the paid time for absences from work due to illness or injury.
Upcoming Webinar
Please join the upcoming webinar discussion on the practical and legal implications of these legislative changes. In addition to the Minnesota Secure Choice Retirement Program, pay transparency, and ESST, the webinar will also dive into important policy considerations for the upcoming Minnesota Paid Family Medical Leave Act. The webinar will be held at 11:30 a.m. CT on Nov. 4. Pending one hour of Minnesota CLE credit and SHRM credit.
Register for the webinar here.
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