Minneapolis employers still have to provide their workers with paid sick time, a Minnesota Court of Appeals judge ruled Monday in a setback for businesses that oppose the policy.

The Minnesota Court of Appeals affirmed a January Hennepin County District Court ruling in an unpublished opinion that said the city can proceed with the ordinance, which took effect July 1, but for now can apply it only to Minneapolis-based employers.

"We're really happy that, again, the court ruled that the city was well within its authority in providing this very basic protection for employees," City Attorney Susan Segal said.

It's the latest turn in a case that began nearly a year ago, when the Minnesota Chamber of Commerce challenged the ordinance in a lawsuit against the city, arguing it is pre-empted by state law. The outcome of the case will have ramifications outside Minneapolis — St. Paul also has an earned sick-time ordinance that went into effect July 1, and Duluth is considering its own ordinance.

In a statement Monday, the Chamber said it plans to appeal the appellate court's decision. The Minnesota Supreme Court will decide whether to take the case.

"We're pleased that the court prevented Minneapolis from imposing its ordinance on businesses that don't even have any physical presence in the city," Chamber President Doug Loon said in the statement. "At the same time, we're disappointed that the Court of Appeals allowed the underlying Minneapolis ordinance to stand. We respectfully believe that the court misapplied the law regarding the city's authority."

The ordinance requires employers to allow employees working in Minneapolis to earn one hour of paid sick or safe time for every 30 hours worked, up to 48 hours a year. Safe time can be used for reasons related to domestic abuse, sexual assault or stalking.

The Chamber has argued that state law already covers paid leave, and so prohibits Minneapolis from adding another requirement. The city has countered that the state and municipal policies don't conflict.

Both the Chamber and the city appealed the January district court ruling. Hennepin County District Court Judge Mel Dickstein declined to issue a temporary injunction stopping the city from proceeding with the ordinance, which the Chamber appealed. He did issue a temporary injunction preventing the city from enforcing the ordinance against nonresident employers, which the city appealed.

Monday's appeals court decision said the district court "did not abuse its discretion" in either of those decisions.

Segal said the appellate court ruling was a good outcome for the city. Even though the ruling affirmed the district court's decision to limit the ordinance to Minneapolis-based employers, the appellate court made a point to say the city has a strong argument for applying the ordinance to all employees who work in the city, regardless of where their employer is based, Segal said.

"They signaled likely support for the city on that issue," she said.