Purpose

• The bill would exempt small local government employers from Minnesota's Paid Leave Law. It would also adjust who counts as a covered employer, employee, and covered employment, with an option for excluded small local government entities to opt in to coverage.

Key Definitions and Scope

• Covered employment: An employee’s work is considered covered if, in the calendar year, at least half of the employment occurs in Minnesota, or if at least half of the employment occurs outside Minnesota but the employee lives in Minnesota for at least half the year. Certain workers are not counted as covered employment (see exclusions below).
• Employee: An individual who performs services for an employer, with certain exceptions.
• Employer: Any person or entity that has someone in covered employment, with several large public and private entities included, such as state agencies, higher education, charter schools, and many local governments with more than 50 employees. Some entities also fall under larger categories like municipal or quasimunicipal corporations.
• Small local government exemption: Local government entities with 50 employees or fewer (as calculated under a provided method) are excluded from coverage unless they opt in.
• Seasonal employees: A defined category excluded from being treated as employees for the purposes of the Paid Leave Law.

Main Provisions

• Exemption for small local governments: Local government entities with 50 or fewer employees would be excluded from the Minnesota Paid Leave Law unless they choose to opt in to coverage.
• Opt-in option: Excluded local government entities may elect to participate in the Paid Leave Law following a commissioner-approved process; if they opt in, services by their employees would be treated as covered employment.
• Expanded and clarified definitions: The bill revises how “covered employment,” “employee,” and “employer” are defined to reflect the exemption threshold and to clarify who is covered or excluded.
• Rulemaking authority: The commissioner would be empowered to adopt rules to further define how these provisions apply and to set criteria for covered employment for employees who don’t neatly meet the criteria but work for a Minnesota employer.

Significant Changes to Existing Law

• Threshold change for local governments: Instead of treating all municipalities and local governments the same, entities with 50 or fewer employees are now broadly exempt from the Paid Leave Law unless they opt in.
• New opt-in mechanism: Excluded entities can choose to participate, bringing their employees under the paid leave requirements if they complete the approved opt-in process.
• Revised categories of who is an employee and who is an employer: The bill explicitly lists exclusions (e.g., self-employed individuals, independent contractors, seasonal workers, and small local governments) and reiterates who counts as an employer (including charter schools and larger local government entities with more than 50 employees).
• Rulemaking and definition flexibility: The commissioner’s ability to issue rules is expanded to clarify and define how covered employment and related terms apply in edge cases.

Implementation and Administration

• The Commissioner of the Department of Labor and Industry would set the detailed criteria and procedures, including the opt-in process for small local governments and any rules needed to apply the covered employment definitions.

Relevant Terms - Minnesota Paid Leave Law - covered employment - employee - employer - small local government exemption - 50 employees or fewer - opt in - commissioner - rules (Chapter 14) - seasonal employee - self-employed - independent contractor - charter school - municipality - Metropolitan Council - local government entity - Minnesota Statutes 268B.01 - 268B.14 subdivision 5b