Minnesota Law
Minnesota Employment Law: Individual
- Employment Law: Individual
Employment Law: Individual
The Employment Relationship
Independent Contractor Versus Employee
When a worker gets paid to do a task or provide a service for another person, the worker is either an independent contractor or an employee. The distinction is important both for the business and the worker, but it is not always clear. An employer who hires someone as an independent contractor can avoid many tax and record-keeping requirements. For a worker, the classification determines the benefits a worker is entitled to, whether the worker can file a workers' compensation claim, and whether the worker is protected by federal and state wage and hour regulations. Employees enjoy substantially more protection in the workplace than do independent contractors.
Whether a worker is an independent contractor or an employee is based on the work performed, not the worker's title. The more control an employer has over a worker, the more likely it is the worker is an employee. The more a worker acts like an independent business enterprise, the more likely the worker is an independent contractor. In some cases, the status is clear: a worker who arrives at a set time every day, is trained by the employer, uses the boss's tools or equipment, and is paid by the hour, week, or month, is most likely an employee. Someone who works for more than one company at a time, can set his or her own hours, and realizes a profit or risks a loss is most likely an independent contractor.
A worker or an employer who is unsure about the legal status of the employment can ask the Internal Revenue Service, the Minnesota Department of Revenue, or the Minnesota Department of Jobs and Training for an opinion based on the respective agency's guidelines. Guidelines vary from agency to agency, and one agency may classify someone as an employee even though another considers the same employee an independent contractor.
Employment at Will
The state of Minnesota recognizes the traditional rule of employment at will. This means that, unless there is an agreement to the contrary, an employer can discharge an employee at any time for any reason other than an illegal reason. It also means that an employee can resign at any time, for any reason, with or without giving notice. The implications of this relationship are far-reaching. Employers do not need a good reason to fire someone. So long as an employee is not fired for an illegal reason, such as racial or gender discrimination, even a silly reason is enough to fire an employee. Similarly, an employee is free to leave an employer for any reason at all, even if by doing so he or she greatly inconveniences the employer.
Most workers in Minnesota are at will employees. Generally, all employees are at will unless the employer does something to change the status of the relationship. There are several ways an employer can alter the relationship. An employer might enter into an oral or written contract guaranteeing to employ someone for a specific period of time or promising to terminate the employee only for specified reasons. An employee handbook or collective bargaining agreement can limit the employer's right to terminate employees. An employer can inadvertently limit his or her right to fire an employee if, by his or her actions, he or she gives the employee reason to believe the job will continue. For example, if an employer promises a job to someone from out of state and that person moves to Minnesota specifically to take the job, the employment relationship is probably not at will because the employee has gone to the trouble and expense of moving after reasonably relying on the promise of new employment.
Government Administered Benefits
Unemployment Insurance
Unemployment insurance provides benefits to employees who are laid off, fired, or forced to leave their jobs. Most employees are covered by unemployment insurance, a program administered by the state and funded by employer contributions.
Application
Unemployment benefits are not automatic; the worker must apply for them from the Minnesota Department of Jobs and Training. After gathering information about an applicant, the department makes an initial determination whether the person is eligible to receive benefits. If the department's decision is that the employee is eligible, the department informs the former employer. Because the former employer pays the benefits, the employer has the right to know what the former employee told the department and has an opportunity to present its side of the story.
Eligibility
Not everyone who leaves a job is eligible to receive unemployment benefits. To be eligible to receive unemployment benefits, the employee must have worked at least 15 weeks and made at least $1000 in wages in any one calendar quarter. The employment must end either by the employer being fired for a reason other than misconduct, or by the employee quitting because of an intolerable work environment.Independent contractors are not covered by unemployment insurance.
An applicant cannot receive benefits if any one of the following conditions applies:
- The applicant is a student hired by the educational institution in which he or she was enrolled
- The applicant is a commission-only salesperson
- The applicant is fired for misconduct
- The applicant participates in a labor strike
- The applicant refuses an offer to work again for the former employer
- The applicant fails to apply for or accept suitable work
- The applicant quits for any reason other than an illegal or otherwise intolerable work environment
Conditions of employment that generally do not let an employee collect unemployment benefits include: a demotion or other change in management structure that leads to a modest decrease in wages or benefits, disagreements over management policy, and reasonable changes in workplace hours or employee regulations.
Benefits
If the department decides that an applicant is eligible to receive benefits, he or she receives a portion of their previous salary up to a maximum ceiling determined by the average statewide salary calculated each year. Benefits are paid for up to 26 weeks or until an applicant has received one-third of his or her former salary, whichever is sooner. Finding a part-time or temporary job will not necessarily prevent someone from receiving unemployment benefits if he or she continues to look for permanent work. The recipient keeps $50 or 25 percent of his or her weekly income, whichever is more. Unemployment benefits are reduced by any income in excess of $50 or 25 percent.
Workers' Compensation
Workers' Compensation provides benefits to employees injured in the workplace, regardless of whether their own or anyone else's negligence causes the injury. With few exceptions, all Minnesota employees are covered by the Minnesota Workers' Compensation Act.
The benefits available to workers include death benefits, permanent and temporary total disability, permanent and temporary partial disability, and medical and related expenses. The benefit amounts are determined by state guidelines and can be as high as two-thirds of a worker's salary at the time of the injury.
Workers' Compensation is discussed further in the Workers' Compensation Law Chapter.
Social Security
Social Security provides benefits for retired workers, including full- or part-time wage or salary workers, self-employed persons, farm workers, members of the United States Armed Services, employees of private nonprofit organizations, most federal, state, and local government employees, and most domestic workers. The usual age for first receiving Social Security benefits is age 65; however, a worker has the option of initiating benefits at age 62. The amount of each monthly check varies depending on how much the worker made each year. The higher his or her pay, the higher the benefits, up to a maximum dollar amount.
Social Security is discussed in greater detail in the Elder & Social Security Law Chapter.
Civil Rights in the Workplace
Many federal civil rights laws apply only to employers with a minimum number of employees. The federal Americans with Disabilities Act, for example, only applies to employers with 15 or more employees after July 26, 1994. The Minnesota Human Rights Act, however, applies to all Minnesota employers who have one or more employees, except close relatives. In addition, the Minnesota act covers more types of discrimination than do the federal laws.
In General
Most employment discrimination is outlawed by two major civil rights acts passed by Congress in 1964 and 1991 and by the Minnesota Human Rights Act. Through a combination of these laws, Minnesota workers are protected against discrimination based on race, color, creed, religion, national origin, sex, sexual orientation, marital status, status with regard to public assistance, membership or activity in a local commission, age, or disability.
People frequently refer to "Title VII" rights when they are talking about a particular section of the Civil Rights Act of 1964. Title VII prohibits discrimination in a wide number of employment areas including hiring, firing, recruitment, transfers, promotions, testing, layoffs, recalls, fringe benefits, training, apprenticeship programs, and job advertisements. Title VII also specifically prohibits retaliation against a person who files a charge of discrimination, participates in an investigation of discrimination, or opposes an unlawful employment practice.
Under certain extremely limited circumstances these civil rights acts allow employers to base their employment decisions or practices on a person's race, marital status, sex, etc., if the employer can demonstrate a truly legitimate need. For example, it is not impermissible sex discrimination to refuse to hire a man to be an attendant in a women's locker room. Religious institutions can refuse to hire individuals based on their religious beliefs, but only for positions that are directly related to the performance of religious duties. Religious institutions are generally not allowed to discriminate when hiring individuals for secular tasks such as secretarial or janitorial work.
Certain employers, such as police departments, can base employment decisions on an applicant's physical abilities. Some pre-employment exams are allowed under Minnesota law if they measure skills that are truly essential for an applicant to have in order to perform a particular job and are not applied in a selective or discriminatory way. Lawyers, for example, must pass a bar exam before they can practice law, and a company hiring secretaries can give applicants typing exams.
Proving discrimination in the workplace depends on the specifics of each situation. It is generally easier to prove discrimination from a repeated pattern of behavior rather than an isolated incident. For example, a strong case of race discrimination could be made against an employer if members of a certain class of people are held to a higher standard than others.
In addition, any documented evidence showing an employer is prejudiced against a class of people can strengthen a discrimination case. If an employer makes statements such as "blacks don't take orders well" or "women aren't capable of making tough management decisions," this will likely increase the chances of proving discrimination, especially if the statements are made repeatedly and in the presence of witnesses.
A person who feels that he or she has been unfairly discriminated against or harassed in the workplace can file a complaint with the Minnesota Department of Human Rights or the federal Equal Employment Opportunity Commission (EEOC). The Minnesota Department of Human Rights enforces the Minnesota Human Rights Act, and the EEOC enforces federal civil rights in the workplace. When a person files a complaint with either of these agencies, that agency cross-files with the other agency. A victim of discrimination has 300 days to file a complaint with the EEOC or 365 days to file a complaint with the Department of Human Rights after the alleged discriminatory incident occurs. The victim of discrimination can also hire a private attorney to pursue a claim against an employer.
Age Discrimination
The Age Discrimination in Employment Act (ADEA) expands Title VII prohibitions against age discrimination. Most employers cannot enforce mandatory retirement policies, except under a few very specific circumstances where age is truly a qualification for doing a particular job, such as firefighting, police work, or flying airplanes. Anyone age 40 or over who works for an employer with 20 or more employees is protected by the ADEA and cannot be retired against his or her will, regardless of age, as long as he or she can do the job. Any Minnesota employer employing fewer than 20 employees is prohibited by Title VII and other federal and state laws from discrimination based on age, but such an employer can force an employee aged 70 or older to retire.
Discrimination Against Persons with Disabilities
The Americans with Disabilities Act (ADA) is a federal law that prohibits discrimination based on physical and mental ability. The ADA requires employers to make reasonable accommodations for physically or mentally disabled employees, including modifying facilities and work schedules and providing special training. Using pre-employment tests that identify and exclude disabled applicants is permissible only where the tests are unequivocally job-related.
The ADA does not change in any way an employer's right to hire people who have the skills to perform the "essential duties" of a job. The ADA makes it illegal to refuse to hire an applicant or to fire a current employee who lacks physical or mental abilities that are not essential to the job. For example, an employer cannot reject a person with epilepsy who has applied for a job as a daycare provider merely because the applicant's epilepsy prevents her from having a driver's license. Just because the applicant could not take children to a hospital in emergencies is not a valid reason to discriminate against the epileptic applicant, since occasionally driving a child to a medical clinic or hospital is not an "essential" task of a daycare provider.
An employer required to comply with the ADA must do whatever is reasonable to accommodate a person's disability, including modifying work schedules, changing the work environment, buying or modifying special equipment, or reassigning to another position a disabled employee who can no longer do the "essential duties" of a job. A "reasonable accommodation" for an employer to make is one that does not place an undue burden on the employer.
The ADA only protects from discrimination those people with permanent conditions that limit a major life activity. Thus, an employee who has a sprained ankle that is expected to heal fully is not protected under the ADA, even though that employee is disabled for a period of time. A person with a permanent disabling condition that is controlled by drugs, physical therapy, or by some other treatment, however, is covered by the ADA. For example, an epileptic whose seizures are controlled by medication is protected from discrimination by the ADA. People with AIDS or HIV are covered by the ADA. The ADA also prohibits discriminating against individuals who have completed or are still participating in drug rehabilitation programs. However, an applicant or employee currently using illegal drugs is not protected by the ADA.
Sexual Harassment
Everyone, male or female, has the right to be free from sexual harassment in the workplace. Sexual harassment can take many forms:
- Someone says something sexual about a coworker's appearance
- An employer enforces a mandatory dress code that provokes others to make sexually explicit comments
- Someone makes unwanted sexual contact
- Someone connects a condition of the job, such as a raise, with sexual contact
- Someone makes sexual jokes or explicit sexual comments that embarrass a coworker
- Someone displays or passes around pornographic pictures
Unwelcome behavior must be both undesirable and offensive to be considered sexual harassment. Of these two criteria, the most problematic is determining what kind of behavior is offensive. Because of the diversity of sexual attitudes in this country, what is sexually offensive to one person may just be harmless sexual banter to another. The law uses the "reasonable person" standard to determine what is offensive; if a reasonable person would find an action offensive, then it is offensive.
While determining what kind of behavior constitutes sexual harassment is an inexact science, some general descriptions of sexual harassment can be made. A single, or very occasional, sexual joke or sexual comment is not sexual harassment unless the comment unequivocally offers workplace advancement in return for sexual favors. Unwanted touching of someone else's body is sexual harassment, as is the repeated telling of lewd or obscene jokes that make an employee uncomfortable. A case for sexual harassment is strengthened if the person doing the touching or telling the dirty jokes has been repeatedly told that he or she makes the workplace uncomfortable. A case for sexual harassment is weakened if the person claiming harassment participates in the joke-telling or similar activity.
In addition to laws designed to give victims a civil remedy against sexual harassment, criminal laws provide remedies against the most serious forms of unwanted sexual contact. If a harasser's behavior crosses the line into assault, battery, or rape, the victim can file criminal charges against the perpetrator.
Anyone fired or forced to leave a job because of sexual harassment may be entitled to receive unemployment insurance benefits while searching for a new job.
Pregnancy Discrimination
Title VII protects pregnant workers and pregnant job applicants from discrimination. Employers cannot refuse to hire a woman because she is pregnant, fire a woman because she is pregnant, take away benefits or accrued seniority because a woman takes maternity leave, or fire or refuse to hire a woman who has an abortion.
Generally, an employer must treat pregnant women the same as other workers who cannot perform their jobs for short periods of time. Thus, if an employer allows employees to take a leave for a broken leg or short-term illness, he or she must allow pregnant women to take a leave under the same terms and conditions. Pregnancy leave is also protected under the Family and Medical Leave Act discussed below.
Other Workplace Rights and Responsibilities
Wages and Hours
At the start of 1994, the federal minimum wage for adult workers age 18 and over was $4.25 per hour. Exceptions to the minimum wage law are given for some minors, disabled workers, and trainees. Employers must pay at least the minimum wage, even to employees who earn tips. Employers cannot force employees to share their tips with other workers or managers, although employees may do so voluntarily. With few exceptions, employers must pay hourly employees one and a half times their regular rate for all hours worked in a week in excess of 40 hours.
Certain salaried workers are exempt from minimum wage standards and overtime regulations. To be exempt, an employee must be in an executive, administrative, or professional position and receive at least $250 each week in salary or fee. The employee must either supervise at least two other workers, manage an office or a business operation, be a skilled artistic performer or a teacher, or work in a profession requiring advanced knowledge, such as engineering.
Students who are 16 or 17 years old cannot work on days before school is scheduled between 11:30 p.m. and 4:30 a.m. Minors age 14 and 15 years cannot work between the hours of 7 p.m. and 7 a.m. while school is in session and from 9 p.m. to 7 a.m. during summer vacation, and they cannot work more than three hours per day or 18 hours per week during the school year. Minors aged 15 years or younger working as models, actors, or performers, doing chores such as babysitting and housework for others, or working for their parents are exempt from these time-of-work restrictions. Also exempt from these time-of-work restrictions are newspaper carriers, if they are at least 11 years old, and those working in agricultural jobs with parental permission.
Substance Abuse in the Workplace
The Minnesota Human Rights Act does, under some conditions, protect alcoholics and drug addicts from discrimination. The protection is not absolute; an alcoholic or drug addict can be disciplined or fired if the drug or alcohol addiction prevents the addict from performing essential job duties, or if the addiction endangers the safety of others.
Under certain circumstances, employers in Minnesota can compel employees to pass drug and alcohol tests as a condition of employment. These tests must not be given in a discriminatory way, and if passing a drug or alcohol test is a job requirement, then all employees performing that job must subject to the testing requirement.
An employer may test an employee for drugs and alcohol only under the following conditions:
- Reasonable suspicion: when an employer notices obvious signs (slurred speech, glazed eyes, etc.) that an employee is under the influence of drugs or alcohol; when an employee injures herself or another worker while on the job, or has an accident while operating a vehicle to perform a work-related task; when an employee has unmistakably violated workplace rules on drugs or alcohol while operating an employer's machinery, equipment, or vehicle.
- Safety-sensitive positions: when an employee performs a task in which impairment by drugs or alcohol directly affects the safety of other workers or the general public.
- Routine physical exams: when conducting a routine physical exam, provided that giving such an exam is directly related to job performance. In addition, such a test cannot be required more than once a year and employees must be given at least two weeks' written notice of the exam.
- Treatment program follow-up: at any time in the two years after an employee completes a drug or alcohol treatment program, provided the treatment was covered by an employee benefit plan or if the employer directed the employee to complete the treatment.
Parenting, Family, and Medical Leave
Both the State of Minnesota and the federal government require certain employers to provide parenting, family, and medical leave to qualified employees. The federal law in this area preempts state law only where the federal law provides greater benefits. In areas for which Minnesota provides greater benefits, Minnesota law is controlling. Accordingly, it pays to be familiar with both laws.
Federal Law
The Family and Medical Leave Act of 1993 (FMLA) is a federal law that allows qualified employees to take up to 12 weeks of unpaid leave to attend to family matters, including health emergencies. Under the act, a qualified employee may take an unpaid leave following the birth or adoption of a child, after acquiring a foster child, to care for an immediate family member with a serious health condition, or to care for his or her own serious health condition. Men and women are equally entitled to take these leaves.Not every worker is qualified to take these leaves of absence. A person must be a full-time employee of a company with 50 or more employees and have worked for the company at least 12 months. In addition, an employee must have worked at the company for at least 1250 hours during the 12 months immediately prior to taking a leave under the FMLA.
Under the act, an employer must maintain the health benefits that an employee was receiving at the time a leave begins, during periods of unpaid FMLA leave at the same level and in the same manner as if the employee had continued to work. Under most circumstances, an employee may elect or the employer may require the use of any accrued paid leave for periods of unpaid leave under the FMLA. The employee is not entitled to accrue benefits such as vacation time or sick leave during a leave under the FMLA.
When the leave is foreseeable, an employee must provide the employer with at least 30 days' notice of the need for the leave. If the leave is not foreseeable, then the notice must be given as soon as it is practical. An employer may require medical certification of a serious health condition from the employee and may require periodic reports during the period of leave of the employee's status and intent to return to work. In addition, an employer may require a fitness-for-duty certification upon return to work in appropriate situations.
When an employee returns from a leave under the FMLA, the employee is entitled to be restored to the same job the employee left when the leave began. If the same job is not available, the employer must place the employee in an equivalent job with equivalent pay, benefits, duties, and responsibilities. Any benefits accrued by the employee at the time of the leave have to stay with the employee. Under the act, employers are prohibited from discriminating against or interfering with employees who take FMLA leaves.
Minnesota Law
Under the Minnesota Family Leave Act employers with 20 or more employees are required to provide qualified employees with up to six weeks unpaid vacation time for the birth or adoption of a child. During the employee's absence, the employer must make insurance benefits available to the employee, although the employee can be required to make the payments for that insurance. Upon return, the employee is entitled to his or her previous job or a comparable position. A worker choosing not to return to work at the end of a leave period may be considered to have voluntarily quit and be denied unemployment benefits. Employers with 20 or more employees must allow employees to use their own accrued sick, disability, or medical leave to care for a sick or injured child for such reasonable period as necessary to care for the child.
Privacy
Employees' right to privacy while at work is a hotly debated issue today as increasing numbers of employers turn to searches, surveillance, and eavesdropping in an attempt to better monitor their employees' activities. The law in this area is evolving and still largely unsettled, but it is fair to say that an employee surrenders some of his or her right to privacy at the workplace door. An employer has far greater legal right to monitor employees than the government has to monitor citizens.
The controlling factor courts look to in deciding if an employee has a right of privacy is whether an employee's expectation of privacy in a particular situation is reasonable. For example, the expectation of privacy is more reasonable for items in a locked desk drawer than for items left out on a desk. Similarly, the expectation is more reasonable for private phone calls made on a pay phone than for work-related calls made on the employer's phone.
The reasonable expectation standard is not a very strong guarantor of employee privacy. An employer can dramatically expand his or her right to searches, monitoring, and surveillance simply by giving notice to employees. Once an employee receives notice that the employer reserves the right to monitor calls, search offices, read electronic mail, or film the workplace, there is very little reasonable expectation of privacy.
Leave of Absence
Under Minnesota law, all employers are required to provide paid voting leave during the morning of regularly scheduled state primary or general elections, presidential primary, or election to fill a vacancy in the U.S. House of Representatives or Senate. All employers are required to provide unpaid leave so that employees can serve on juries, testify in trial, or serve in the military. All employers must provide up to 16 hours of unpaid leave per school year so that parents or guardians can attend school conferences or activities otherwise scheduled during the work day. Employers with at least 20 employees are required to provide up to 40 hours paid leave for any employee donating bone marrow.
Whistleblower Statutes
Minnesota and the federal government both forbid an employer from firing a worker in retaliation for reporting a violation of law or for refusing to participate in activity the employee believes to be illegal. If an employee acts in good faith and reports suspected illegal activities to the employer, any governmental agency, or law enforcement officer, the employee cannot be fired or be treated adversely. The employee need not go through internal employer sponsored channels to report suspected illegal activity.
Employee Access to Personnel Records
Employees who work for companies with 20 or more employees are guaranteed access to their personnel records. An employee is anyone currently working for the company or who has been separated for less than one year. Independent contractors are not covered.
The personnel record includes: application, wage or salary history, commendations, warnings, discharge or termination letters, employment history and job titles, and performance evaluations. In most situations, the personnel record does not include written references, information regarding allegations of criminal misconduct, results of employer administered tests, or statements or portions of statements by coworkers concerning job performance that would disclose the identity of the coworker by name, inference, or otherwise.
Resources
Minnesota Small Business Assistance Office, 500 Metro Square Building, 121 Seventh Place East, St. Paul, MN 55101-2146; (612) 296-3871 or 1-800-657-3858. (free booklets: A Guide to Starting a Business in Minnesota (13th ed. 1995); An Employer's Guide to Employment Law Issues in Minnesota).
Robert Coulson, Empowered at Forty: How to Negotiate the Best Terms and Time of Your Retirement (Harper Business, New York, NY, 1990).
Minnesota Department of Jobs and Training, 390 Robert Street North, St. Paul, MN 55101; (612) 296-6141.
Equal Employment Opportunity Commission, 330 Second Avenue South, #430, Minneapolis, MN 55401; (612) 335-4040 or 1-800-669-4000.
Minnesota Department of Human Rights, 500 Bremer Tower, 82 Seventh Place East, St. Paul, MN 55101; (612) 296-5663 or 1-800-657-3704.
Minnesota Department of Labor and Industry, Workers' Compensation, 443 Lafayette Road, St. Paul, MN 55155, (612) 296-2432 or 1-800-342-5354; Duluth: Canal Park, 1111 Buchanan Street, Duluth, MN 55802, (218) 723-4670 or 1-800-365-4584; Detroit Lakes: 714 Lake Avenue, #104, Detroit Lakes, MN 55601, (218) 846-0766 (information on OSHA, labor laws, unemployment, wage and hour, and workers' compensation).
United States Department of Labor, Employment Standards Administration, Wage and Hour Division, (202) 219-8743, TDD 1-800-326-2577 (free publications: Compliance Guide to the Family and Medical Leave Act, June 1993; Small Business Handbook: Laws, Regulations and Technical Assistance Services, 1993).