Thousands of businesses are reviewing budgets, altering payroll systems or talking with unions as they prepare for one of the most divisive local government mandates in the Twin Cities’ recent history.
In a month, St. Paul and Minneapolis will require employers to give workers paid sick leave. Companies that held off on preparations, waiting to see if state lawmakers would block the sick time rule, are rushing to get ready for July 1. City staff is offering help — but for now, employers acknowledged, the sick leave responsibility is in their hands.
“Unless you know how my system of payroll works, right here, I’m not sure there’s a lot someone can do for me,” said Holly Hatch-Surisook, owner of Sen Yai Sen Lek restaurant in Minneapolis. “It’s just another thing to track, and there are so many things to track when you’re a small business wearing all the hats.”
The cities’ regulations differ slightly, but the goal is the same: to allow workers to stay home if they are ill, need to take care of a sick family member or deal with certain safety crises. Some residents and employers said the new standards will prevent the spread of illnesses and ensure companies treat workers fairly. Others see the looming change as an additional cost and administrative nightmare that could push businesses to leave the metro.
“I think it’s great to have time to take care of the family,” said Mark Engel, president at Atlas Manufacturing in Minneapolis. “But who’s going to pay for it?”
With the cost of sick leave in mind, Atlas recently negotiated a two-year pay freeze in its employees’ union contract, Human Resources Manager Shelly Paulsrud said. Many business owners are not ready.
“A lot of our members are only vaguely aware that this exists at this point,” said Marie Ellis, with the St. Paul Area Chamber of Commerce. And when they hear the change is almost a month away, “What I’ve found, then, is a lot of people are panicking.”
City staff are attempting to alleviate that panic.
Minneapolis and St. Paul employees have talked about sick time on radio shows and at business group events. St. Paul staff sent nearly 12,000 postcards with highlights of the rule to businesses and plan to post signs on the light rail.
The cities want businesses to understand what’s required and workers to know what they are entitled to, said Jessi Kingston, director of St. Paul’s Department of Human Rights and Equal Economic Opportunity. Staff from both cities are fielding questions from confused business owners, who are often asking how the regulation fits with a union contract.
For most companies, particularly small ones that cannot afford a payroll specialist, their biggest worry is keeping track of the hours employees accrue. A worker will be able to earn one hour of paid leave for every 30 they work, up to 48 hours a year. They can carry over 80 hours from one year to the next.
Ruthena Fink looked into a “nice, fancy system” to keep track of her five part-time employees’ hours at Grand Jeté dancewear store. It cost about $100 a month, more than her small Grand Avenue shop could afford.
“It’s going to be paper and pencil, at least initially,” Fink said. “Obviously this is time consuming and burdensome for us, as well as [for] lots of small businesses.”
But Fink and other St. Paul businesses with fewer than 24 employees have a bit of leeway — the city is not requiring them to pay for sick leave until Jan. 2018.
Minneapolis employers must comply July 1, though businesses with five or fewer employees only have to offer unpaid sick and safe time. In St. Paul, companies of all sizes must pay for earned sick leave.
For the first year, Minneapolis will focus on education and give warnings to employers who are not complying, instead of strict enforcement, City Council Member Elizabeth Glidden said.
St. Paul won’t slap people with a fine if they accidentally miscalculate hours, Kingston said. She encouraged people to use the city’s Excel tool that helps employers track sick time — or just offer a lump sum of 48 hours right away.
Business owners said they were hoping — without much optimism — that the state would quash the regulations altogether.
Republican lawmakers have been pushing for legislation that would block cities from setting workplace standards like sick leave and an increased minimum wage. A bill containing that provision was passed by the Legislature in special session last week, but Dayton pledged to veto it when it reached his desk.
“A lot of businesses are waiting for the finality of that,” said Jonathan Weinhagen, president and CEO of the Minneapolis Regional Chamber of Commerce. “How much effort do you want to put into preparing for implementation when there may be no implementation to be had?”
To add to the uncertainty, the Minnesota Chamber of Commerce sued Minneapolis last year in an attempt to halt the ordinance. A Hennepin County judge gave the city the green light in January to move forward with most of its sick time rule, but the chamber has since filed an appeal.
Meanwhile, Minneapolis and St. Paul officials kept working toward July 1.
“There can always be a challenge against ordinances in a city. And until something becomes unenforceable, we can’t just stop everything that we’re doing,” Kingston said.
David Weiss, who lives in St. Paul’s Hamline-Midway neighborhood, was one of many people who urged state lawmakers not to block the sick leave ordinances. The Roseville food delivery organization where Weiss works part-time didn’t offer sick time. But the nonprofit, prompted by the Twin Cities’ ordinances, added paid sick leave last fall, Weiss said, keeping workers and the people who are receiving food deliveries healthy.
At Parkway Pizza in Minneapolis, owner Sam Nestingen sees things differently. The mandate insinuates businesses weren’t taking care of employees, he said, and he takes that personally. But he’s resigned to the change, though he hasn’t done much to prepare. When the time comes, he said he thinks their bookkeeper will handle things.
“It’s not something I would prefer to do. But if that’s the will of the people, so be it,” Nestingen said. “At the end of the day we’ll survive.”