[co-author: Leah Shepherd]

New laws in Minnesota will change how employers need to handle parental leave, tips, and recordkeeping. Most of the changes were part of the state’s omnibus bill for 2024 and are set to take effect on August 1, 2024.

Quick Hits

• Minnesota’s legislature recently amended the state’s new paid family and medical leave law, and some of those changes will take effect on August 1, 2024. The rest of the law will take effect on January 1, 2026.
• Minnesota employers will need to pay workers the full amount of tips received by card or electronic payment, rather than subtracting a swipe fee first starting August 1, 2024.
• Minnesota employers will have to keep pay stubs for at least three years starting August 1, 2024.

New Compliance Obligations for Employers

Paid Parental Leave: Minnesota’s new paid family and medical leave law will take effect on January 1, 2026. However, starting on August 1, 2024, pregnant workers can take prenatal medical leave without it counting against their twelve weeks of parental leave. Employers must offer the same health benefits during pregnancy and parental leave, contributing to the health benefits as if the employee were working. Previously, some Minnesota employers did not have to pay for the health benefits during parental leave under state law for employees who were not covered under the federal Family and Medical Leave Act (FMLA). The state recently issued guidance on changes to the state law.

Paying Tips: Starting August 1, 2024, Minnesota employers must pay workers the full amount of tips paid by credit card, debit card, or electronic payment. Previously, employers could deduct a swipe fee from tips. Gratuities received through cards or electronic payment now must be paid in full to the employee in the next pay period.

Pay Recordkeeping: Starting August 1, 2024, Minnesota employers must save employee earnings statements or pay stubs for three years. This rule applies to current and past employees.

Next Steps

Minnesota employers may wish to review their current practices and policies regarding parental leave, tip disbursement, and recordkeeping, adjusting as needed to comply with state law. Employers may also wish to ensure their online timekeeping systems and contracts with payroll vendors will allow them to make any necessary changes to stay legally compliant.

In addition, employers may want to review the Minnesota’s sick and safe leave law, which covers temporary, part-time, and full-time workers. It took effect on January 1, 2024.