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Minneapolis Sued Over Mandatory Sick Leave

MINNEAPOLIS (CN) — A group of commerce and business organizations is suing the city of Minneapolis over a recent ordinance mandating paid sick leave for employees working in the city.

On May 31, the city passed the Minneapolis Sick and Safe Time Ordinance, which requires private employers in the city with six or more employees to provide one hour of sick time for every 30 hours worked. The ordinance is expected to go into effect on July 1, 2017, although government workers and certain construction workers are exempt.

The plaintiffs, led by the Minnesota Chamber of Commerce, represent a broad range of businesses throughout the state with more than a half million employees combined.

They claim the city wrongly expanded its regulatory reach with the ordinance, creating "an unworkable patchwork of municipal regulations that place an unreasonable burden on Minnesota businesses, discourage business investment in Minnesota and hamper the efficient operation of business in and around the City of Minneapolis and throughout the State of Minnesota."

Minneapolis City Attorney Susan Segel said in an interview that she is "confident" the city can defend the challenge. "The city's new landmark Safe and Sick Time Ordinance is a critical step toward protecting the health, safety and general welfare of Minneapolis residents, workers and visitors," she said.

But the businesses claim the ordinance is preempted by and conflicts with state law, which addresses sick leave benefits but does not require them. As such, the local ordinance extends itself and forbids what is allowable under state regulations, the Oct. 13 lawsuit says.

The plaintiffs take issue not with whether or not private employers should offer paid sick time to employees, but rather the city's attempt to inject itself into employer-employee relationships, they claim.

"In today's global market, it is not possible to regulate employment terms within private employer-employee relationships and limit those regulations to the boundaries of Minneapolis," the lawsuit says. "Employment regulations inherently permeate those boundaries and result in a ripple effect — if not a tidal wave — throughout Minnesota as a whole and beyond."

Before now, the government in Minnesota did not require private employers to provide sick leave — let alone paid sick leave — to their employees, according to the lawsuit. And even though the ordinance is putatively limited to Minneapolis, plaintiffs argue it will impact businesses throughout the state, since many affected companies are located — or have employees located — outside the boundaries of Minneapolis.

In fact, the ordinance could affect any employee in the state whose work takes him or her into the city for 80 hours or more a year, the plaintiffs claim.

"Many of the employees of plaintiffs and their members do not work in just one location and frequently perform work, attend events, and meet with customers and clients in Minneapolis, thereby triggering the ordinance," the lawsuit says.

Plaintiffs are also concerned about how the ordinance applies to employees who deliver goods and services within Minneapolis or telecommute from homes located within Minneapolis.

The Minneapolis Civil Rights Department — not its Department of Health — will enforce the ordinance, which the plaintiffs fear will give the city's civil rights branch sole discretion to investigate suspected violations and order relief such as back pay or double pay of sick time, which could cripple companies that may not even realize they were subject to the ordinance.

This, in addition to potential administrative penalties and fines, the plaintiffs claim, would hinder new business growth within the state.

Plaintiffs also complain that a city-level mandate with global effects creates a "logistical quagmire" as employers try to track and record sick hours and meet ordinance mandates even as employees transfer to positions within companies that may be outside the city limits.

"These tracking requirements are particularly onerous because most companies are not currently equipped to track employees' locations precisely on an hour-by-hour basis to determine whether they are within or outside of a given municipality," the plaintiffs claim.

Minnesota employers such as pump-and-spray equipment manufacturer Graco and design-build firm Otogawa-Anschel, both listed as plaintiffs in the suit, have said that forcing employers to track time among various locations would be "burdensome, difficult, and potentially inaccurate."

Plaintiffs also claim that the administrative burden the ordinance places on businesses would take "time and attention away from innovating and producing goods and services that consumers want to purchase."

Minneapolis' "twin" city, St. Paul, Minnesota, recently passed a similar ordinance, which raises the question of how the Minneapolis ordinance will affect employees who work in both cities and would be subject to two separate ordinances.

St. Paul's mandate is also expected to go into effect on July 1, 2017.

The plaintiffs request an injunction declaring the ordinance void and unenforceable.

They are represented by Christopher Larus of Robins Kaplan in Minneapolis.

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