Minnesota Chamber challenges Minneapolis paid sick time ordinance
By Doug Loon, President, Minnesota Chamber of Commerce
Minnesota is blessed with a diverse business landscape – all sizes and types of companies that make up the economic fabric of our state from border to border. Visit any community and see for yourself.
A manufacturer with a couple of hundred employees working shifts. A Main Street retailer providing jobs for a dozen full- and part-time workers. A hospital whose round-the-clock operations often demand that it contracts with an out-of-town company to provide emergency services. A trucking company crisscrossing the state to serve its clients.
Each business has distinctive operations and workplace needs. Each develops wages and salaries, benefits, policies and procedures that best serve the needs of employer and employees. It’s a sure bet the companies don’t share a uniform employee handbook.
Yet, that’s exactly what the city of Minneapolis is mandating with a new ordinance requiring businesses to provide paid sick time leave. The law takes effect July 1, 2017. In a nutshell, companies with six or more employees must provide paid sick and safe time to all employees who work within the city limits at least 80 hours within a year. Companies must comply with the ordinance even if they do not have a location in the city – or even in Minnesota, for that matter.
The Minnesota Chamber has filed a lawsuit to challenge the paid sick time ordinance. The lawsuit asks the judge to strike down the ordinance and in the meantime prevent the city of Minneapolis from enforcing it. The ordinance is unlawful because it conflicts with state law and seeks to regulate in a policy area that is a statewide concern. Simply put, we seek to ensure consistency of workplace laws and prevent a patchwork of city-by-city workplace regulations.
Businesses already have an incentive to compete for employees by offering the best mix of wage and benefits packages. We wholeheartedly support and encourage employers to provide employees with flexible, paid options for providing care to their families.
Flexibility is the key, however. It’s a far better approach to have employers sit down with employees to develop policies that work for individual workplaces. Imposing a one-size-fits-all mandate stifles any creativity and flexibility with a straightjacket.
At the forefront of our efforts is collecting examples of “best practices” in paid sick leave policies from our members and sharing them with the broader business community. We’d like to hear from as many businesses as possible. Please send your examples to email@example.com.
Our lawsuit, filed in conjunction with a group of co-plaintiffs, will be watched closely. St. Paul has passed a similar ordinance also scheduled to take effect July 1, 2017. Duluth is considering a local ordinance, too. It’s only a matter of time before other efforts “come to a town near you.”
Beyond the legal flaws, the Minneapolis law is particularly troublesome in practical ways:
- The ordinance imposes significant administrative burdens by requiring companies to track exactly how many hours their employees work within the city limits and to pay lawyers to interpret the ordinance. These burdens will become even greater if other cities enact their own varying ordinances.
- The ordinance extends far beyond the boundaries of Minneapolis. Companies that deliver goods and services into the city, who have employees who telecommute from Minneapolis, or who otherwise have employees who attend meetings and events in Minneapolis will find themselves subject to the ordinance – perhaps unwittingly.
The lawsuit parallels the Minnesota Chamber’s efforts at the Legislature to make explicit the fact that state law preempts municipal regulation of wages and benefits. We, along with our local chamber partners, will renew our efforts in 2017 after the Legislature failed to take action this year.
Employers need consistent, statewide workplace regulations. However, mandates on everyday business operations are not appropriate coming from any level of government. Businesses across the state already are adopting paid leave policies designed to meet the particular needs of their enterprise and their employees. State and local policymakers should be encouraging this trend and not imposing one-size-fits-all mandates.
Doug Loon is president of the Minnesota Chamber of Commerce – www.mnchamber.com.
Minnesota Chamber Releases Minnesota Business Benchmarks
Annual report reaffirms innovative, skilled talent; workforce shortage a growing concern
A talented workforce remains a backbone of a growing Minnesota economy, according to the Minnesota Business Benchmarks. But the second annual report produced by the Minnesota Chamber of Commerce and its local Chamber Federation partners cautions that Minnesota could be losing its advantage.
“Our members regularly cite shortage of workers and high taxes as the two biggest impediments to growing and investing in Minnesota. The difficulty of finding workers at all skill levels across all industries is a huge issue for Minnesota businesses,” Chamber President Doug Loon said. “The problem already is exacerbated by a slowing growth in the working-age population coupled with the retiring baby boomers. Plus, we struggle with the persistent achievement gap among students of color.”
The report highlights an additional strain on the workforce. Minnesota is losing more people to other states than it is gaining. This trend is hindering growth opportunities for many companies, Loon said.
Business Benchmarks is a collection of key economic indicators that measure Minnesota’s competitiveness and the health of the state’s economy compared with the rest of the country. Comprehensive, objective data was compiled from sources such as state and federal agencies.
Minnesota continues to lead in many categories, the report shows. But it is slipping in key areas, too.
On the positive front, innovation remains a trademark with Minnesota ranking fourth highest among states in patents per capita. The state ranks second in the nation for residents with at least a two-year degree. It is 10th best in concentration of STEM jobs – science, technology, engineering and mathematics.
The good news/bad news dynamics, however, are reflected in economic growth, Loon said. Minnesota ranked 13th among states for GDP growth in 2015, up from 27th the previous year and tied at the national average of 2.4-percent growth. That improvement, however, was largely on the strength of the first quarter. Minnesota ranked 41st when viewing GDP growth for the final three quarters of 2015 and the first quarter of 2016.
Minnesota improved in job growth and personal income growth but still lags the national averages – ranking 29th and 30th, respectively, Loon noted. And its standing in key tax categories was largely unchanged from 2014. The state is still third highest in the nation for its corporate and income tax rates, and second highest for some business property taxes.
The Business Benchmarks provides an excellent springboard for priorities to focus on at the 2017 Legislature, Loon said. Policymakers and business leaders must work collectively to build on the state’s strengths and minimize its weaknesses.
“We cannot rest on our past successes. We must continue to adapt to changing competitive pressures,” Loon said. “Our work at the Minnesota Chamber is to make Minnesota ready for the future – ready for change and ready to grow.”
For the full report, click here.