By Lisa Schaefer

Following the 2023 legislative session, several new laws impacting compensation and leave benefits for city employees are now in effect.

Repeal of local government compensation cap

The statute setting maximum compensation for city employees was repealed as of May 25, 2023. For many cities, the artificial cap created challenges with recruitment and salary compression. With the salary cap repeal, cities now have the authority to determine what compensation is needed to recruit and retain staff. Cities still need to comply with the Local Government Pay Equity Act, including submitting a report with the State of Minnesota every three years. As a best practice, many cities run a mock pay equity report with the state prior to making any compensation changes to ensure they remain in compliance.

Inquiries into pay prohibited

Effective Jan. 1, 2024, employers can no longer ask about, consider, or require disclosure of pay history of an applicant for the purpose of negotiating wages, benefits, or other compensation. For employees covered by collective bargaining agreements, the law becomes effective for contracts implemented after Jan. 1, 2024.

This law does not prohibit an employer from providing information about the salary range or other benefits. In addition, applicants are allowed to voluntarily disclose their pay history, without being asked. However, the employer can only use the information disclosed to support a salary higher than initially offered.

Cities will want to review their employment applications and hiring procedures to ensure questions related to past salary history are removed. View the LMC Employment Application model form at lmc.org/employmentapp.

Earned sick and safe time (ESST)

Effective Jan. 1, 2024, employers must provide earned sick and safe paid leave to employees who work at least 80 hours in a year. Under the new law, eligible employees will receive at least one hour of ESST for every 30 hours worked, up to 48 hours per year.

The League has resources to help cities better understand the new changes:

• Access a recording of an LMC webinar about ESST at lmc.org/LMCwebinars.
• Access LMC FAQs about ESST at lmc.org/ESSTfaq.
• Contact the League’s HR and Benefits team at [email protected].

State holiday recognition

Two changes were made related to state holidays. June 19 of each year, also known as Juneteenth, was added to the list of mandatory state holidays in which public business cannot be conducted. Christopher Columbus Day (the second Monday in October) has been changed to Indigenous Peoples Day. This day remains an optional state holiday, and cities can decide if city offices will be open.

State law does not generally require the city provide paid leave for employees who are not working. However, many cities choose to provide employees with paid holidays, or are required to do so under personnel policies or collective bargaining agreements.

League updates salary and benefits survey

The League’s current Local Government Salary & Benefits Survey includes data from over 480 Minnesota local governments including approximately 389 cities and 80 counties. Compensation data is collected and validated for 260 benchmark jobs. The 2023 survey has several notable improvements including:

• Increased reliability. We have moved to an annual survey, with a set deadline for cities, counties, and other local government organizations to enter data. Moving to once per year participation is important because it allows the data to be run through a more robust validation process. The participation window for the 2023 survey is now closed. However, we will seek feedback from members regarding the annual deadline, as well as possible enhancements for surveys in 2024 and beyond.
• Addition of incumbent data. The new survey collects incumbent salary data, in addition to salary ranges. Organizations can now access position details or averages, depending on their needs.
• Addition of extensive employee benefits data. Affordability of benefits for employees is a hot topic in relationship to the attraction and retention goals, and benefits programs are increasingly complex. The new survey collects specific details of benefits plans including health insurance and medical plans, types of paid leave, wellness, and other ancillary benefits.

The last legislative session brought significant changes to employee compensation and benefits. As more details become available, the League will continue to evaluate best practices and other implementation details on these new laws through webinars, FAQs, model templates, and consultation.

Lisa Schaefer is the League of Minnesota Cities human resources & learning director. Contact: [email protected] or (651) 281-1203.