The challenges to maintaining — let alone starting or expanding — a business enterprise in Minnesota have reached new heights with the COVID-19 pandemic. Recent racial unrest has raised the stakes even higher in the Twin Cities. Headlines daily remind us of the obstacles we face in providing economic opportunity for all Minnesotans.
On June 10, another event occurred that will have profound impact on the ability to grow businesses — and thus jobs — in our state. The Minnesota Supreme Court upheld the city of Minneapolis law that mandates employers provide paid sick time for employees performing work in the city.
The ruling unfortunately received minimal media attention, which underplays its significance.
Before someone dismisses this as a “Minneapolis only” issue, read the ordinance closely. The law applies to all employers doing business within the city limits even if they don’t have an office within its physical boundaries. Businesses with six or more employees must give employees at least one hour of paid “sick and safe” time for every 30 hours of work, provided those employees work inside Minneapolis for at least 80 hours per year. Companies with five or fewer employees must provide sick and safe time, but it may be unpaid. All businesses of all sizes are required to keep records of who worked in Minneapolis.
The Minneapolis City Council has been unabashed in mandating city-specific regulations on businesses in recent years. For example:
Minneapolis has its own minimum wage law imposing higher rates than mandated by state and federal laws.
It has its own wage theft ordinance with more stringent requirements. Unlike state law, the ordinance does not require showing an employer had “an intent to defraud” an employee of wages in order to establish a claim.
Its staple foods ordinance requires licensed grocery stores to carry a certain amount of basic foods and is aimed at getting healthy foods into places like corner stores, gas stations, dollar stores and pharmacies.
New drive-throughs providing customer convenience are banned.
Retail establishments must charge all customers at least five cents for the convenience of providing paper or plastic carryout bags.
Plenty more laws are on the books; visit the Minneapolis Business Portal website with the greeting, “Everything You Need To Succeed.” Their words — not mine. And many more requirements are under consideration. The list is likely to give any entrepreneur pause before starting up or expanding in Minneapolis. It makes success more challenging, especially relative to other non-Minneapolis locations.
Owners of businesses large and small already collectively hold their breaths when the Legislature goes into session. The Supreme Court decision energizes those policymakers who believe that workplace mandates magically translate into more jobs with better pay and benefits. Instead, the Supreme Court ruling should prompt concern on two fronts:
First, the ruling empowers other cities to impose mandates on businesses operating within their boundaries. St. Paul and Duluth have enacted their own paid leave laws.
Second, given the Supreme Court’s ruling on sick and safe time, it’s reasonable to imagine the next step: Minneapolis and other cities will seek to extend other city-specific laws to any company that does business within their physical boundaries. Minneapolis ordinances now have statewide reach. Is the City Council now another legislature?
The debate over workplace mandates too often gets framed as employers vs. employees. That’s unfortunate. Conversations instead should focus on what’s best for growing jobs and healthy individuals and families. To that end, there ought to be a better way of delivering Minneapolis’ intended results — one that works for employees and employers alike.
As tragic as the events of the last three months have been, they have created opportunities to rethink how we live and work together. Let’s put work rules on the list — everything from paid sick and family leave to scheduling. Let’s do better than to enact a patchwork of city mandates. Businesses recognize the value of a quality workforce. Many already have taken their own initiatives by providing paid leave and other benefits to meet employee needs. Let’s engage all the stakeholders in the conversation rather than imposing “one size fits all” mandates.
Jim Pumarlo, former spokesperson for the Minnesota Chamber of Commerce, lives in Red Wing. The views expressed here are solely his own.