As 2024 unfolds, Minnesota’s hospitality industry faces a dynamic and evolving legislative landscape. Staying informed and proactive is essential for businesses to remain compliant and strategically positioned. This blog post delves into key legislative updates affecting the hospitality sector and offers insights on how to navigate these changes.
Earned Sick and Safe Time (ESST) Law
Overview of ESST Law:
Effective January 1, 2024, Minnesota’s Earned Sick and Safe Time (ESST) law mandates that employers provide paid sick leave to employees who work at least 80 hours annually. This law covers most employees, including part-time and temporary workers, but excludes federal employees and independent contractors.
Key Provisions:
- Employees accrue one hour of ESST for every 30 hours worked, up to 48 hours annually.
- Unused ESST can be carried over to the next year.
- ESST can be used for a variety of personal and family-related reasons.
Impact on Businesses:
Businesses need to adjust payroll and staffing policies to accommodate ESST. This includes tracking accrued sick time and ensuring compliance with the law to avoid penalties.
Salary Transparency in Job Postings (HF 3587 & SF 3725)
Legislation Overview:
Bills HF 3587 and SF 3725 propose that employers with 30 or more employees must include salary ranges and benefits in job postings. This move is aimed at promoting pay equity and transparency.
Objectives:
- Reduce wage disparities, particularly for women and minority groups.
- Provide potential employees with clear compensation information upfront.
Impact on Recruitment Practices:
Employers must update job descriptions and postings to comply with these requirements. HR teams will need training to ensure all job listings include the necessary salary and benefits information.
Paid Leave Program Updates
Summary of Changes:
The Paid Leave Bill passed in 2024 includes technical adjustments such as simplified premium rates for small employers and increased payroll tax rates from 0.70% to 0.88%. It also provides improved guidance for insurers and clearer rules for individuals with multiple employers.
Specific Updates:
- Annual adjustments to premium rates based on actuarial studies.
- Enhanced rulemaking for safety leave applications and certification.
Implications for Employers:
Employers need to adjust their financial planning and payroll processes to comply with these updates. Clear communication with employees about the changes is also essential.
Junk Fees Legislation (HF 3438)
Legislation Overview:
Governor Walz signed HF 3438, also known as the “Junk Fees” Bill, which prohibits businesses from charging additional fees not included in upfront pricing. Effective January 1, 2025, this law aims to enhance pricing transparency for consumers.
Excluded Fees:
- Credit card fees and mandatory gratuities are not covered by this legislation.
Impact on Pricing Strategies:
Businesses must incorporate all service charges into advertised prices. This requires a review and potential adjustment of current pricing models to ensure compliance.
Overtime Rule Changes
Overview of DOL Overtime Rule:
The new Department of Labor (DOL) overtime rule, effective July 1, 2024, raises the salary threshold for overtime eligibility to $43,888 per year, with a further increase to $58,656 in 2025.
Details of Changes:
- Auto-inflator provision for periodic salary threshold adjustments.
- Increased salary thresholds aim to extend overtime protections to more workers.
Impact on Hospitality Industry:
Businesses will face higher wage management costs and must ensure compliance with the new standards to avoid penalties. Legal and HR teams should review current employee classifications and salary structures.
Saint Paul Drive-Thru Ban Proposal
Proposed Ordinance:
Saint Paul is considering banning drive-thrus in certain zoning districts to reduce car dependency and emissions. Existing businesses with drive-thrus would be grandfathered but could lose their status with building modifications.
Implications for Existing and New Businesses:
- Potential shift to walk-up windows and more pedestrian-friendly models.
- Hospitality Minnesota has expressed concerns about the impact on business operations and consumer convenience.
Visa Cap for Seasonal Workers
Legislative Context:
The House Appropriations Subcommittee for the Department of Homeland Security (DHS) has passed a bill to extend discretionary language for additional seasonal worker visas.
Proposed Changes:
- Amendment to make the release of additional visas mandatory annually.
- Aimed at addressing seasonal workforce shortages in the hospitality industry.
Impact on Workforce:
Businesses can better meet their seasonal staffing needs, ensuring smooth operations during peak periods.
Preparing for Legislative Changes
Staying ahead of legislative changes is crucial for businesses in the hospitality industry. Compliance with new laws ensures smooth operations and avoids potential penalties. Prudent Accountants can assist with navigating these changes through services such as compliance advisory, payroll management, and financial planning. By partnering with us, businesses can remain compliant and strategically positioned for success.
Partner with Prudent Accountants
Prudent Accountants offers comprehensive services tailored to meet the unique needs of the hospitality industry. Our expertise includes compliance advisory, payroll management, and financial planning.
Reach out to Prudent Accountants today for a consultation and support in navigating the legislative changes affecting your business. Let us help you stay compliant and strategically positioned for future growth.
By understanding and adapting to these legislative changes, Minnesota’s hospitality businesses can ensure continued success and compliance in 2024 and beyond.
Contact us here!
