HF4496

Purpose

This bill updates how paid leave coverage applies to workers in Minnesota. It changes who is considered covered employment, creates new categories for workers, lets certain employers opt into coverage, and adds rules about retirees returning to work as substitutes without affecting their retirement payments.

Main Provisions

• Redefines who is covered employment:
  • Employment is covered if, in a calendar year, 50% or more of the work is done in Minnesota, or 50% or more is not in Minnesota (but some work is in Minnesota and the worker lives in Minnesota for at least half the year).
  • Some workers are explicitly excluded from covered employment, such as self-employed individuals, independent contractors, seasonal workers, substitute workers, and those already covered by a specific retirement/additional program (36B.015). Employers can opt in to coverage for workers who would otherwise be excluded.
  • The state labor agency (the commissioner) can adopt rules to clarify how this coverage applies, including for workers who don’t fit the standard rules but still work for Minnesota employers.
  • For part-year or split-year workers, paid leave benefits can be used only when the worker is not actively employed and working for a covered employer.
• Adds new definitions:
  • Partyear employment: a fixed-term job under which service is less than 12 months and pay is issued in equal monthly installments over a 12-month period, regardless of actual months worked.
  • Substitute employee: a temporary worker hired to replace a specific regular employee during a defined absence and who does not gain permanent status.
• Clarifies employee scope:
  • An employee is someone who performs services for an employer, but certain groups (U.S. government employees, self-employed, independent contractors, seasonal workers, substitute workers, and those covered under the 356B.015 provision) are not considered employees for these rules.
• Optional coverage for otherwise excluded employers:
  • Employers who would be excluded can choose to participate in coverage, making their workers’ services fall under the paid leave program.
• Reemployment of retirees:
  • A member of an eligible retirement plan may return to work as a substitute without losing their annuity or having their annuity payments change during the period of reemployment.
  • The rules ensure that returning to work as a substitute does not impact the retiree’s ongoing annuity amount.

Significance and Impacts

• Scope of paid leave coverage is narrowed by default for some workers (e.g., self-employed, independent contractors, seasonal and substitute workers) but can be broadened if an employer opts in.
• Introduces new, clearer categories (partyear and substitute employees) to govern how and when paid leave benefits can be used.
• Provides protections for retirees who return to work as substitutes, preserving their annuity during that period.
• Gives the state and employers more flexibility through rulemaking to tailor coverage to different work arrangements.

Notable Changes to Existing Law

• Adds Subd.32a Partyear employment to define a new category of employment for paid leave purposes.
• Adds Subd.40a Substitute employee to define substitute workers explicitly.
• Adjusts Subd.15 (Covered employment) and Subd.17 (Employee) to reflect these new definitions and exclusions.
• Adds a new Sec.5 (356B.015 Reemployment) to govern how retirees may return to work as substitutes and protect annuity payments during reemployment.

Relevant Terms - covered employment - paid leave benefits - partyear employment - substitute employee - opt in to coverage - accrued paid leave - Minnesota employer - employee - annuity - retirement plan (356B.01) - reemployment - return to employment - commissioner (Minnesota Department of Labor and Industry/relating agency) - rules (Minnesota Statutes chapter 14)