MN Case Impacts Employee Handbook

2021 continues the theme of change and uncertainty impacting employers over the past year.

HR Updates: MN Supreme Court Case Impacts Employee Handbook

A recent decision (Feb 3, 2021) impacts employers in MN regarding employee handbooks and contractual language. 

Please reach out for assistance in reviewing your handbook regarding these important updates.

The Case and Implications

On February 3, 2021, in Hall v. City of Plainview, A19-0606, the Minnesota Supreme Court addressed the issue of whether an employee handbook policy can create a unilateral contract (as to that provision), and what impact, if any, a general disclaimer has in negating the existence of a contract based on a specific policy.  

The Handbook contained several contract disclaimers, including: “The purpose of these policies is to establish a uniform and equitable system of personnel administration for employees of the City of Plainview. They should not be construed as contract terms.” Another disclaimer: “[t]he Personnel Policies and Procedures Manual is not intended to create an express or implied contract of employment between the City of Plainview and an employee.”

Favorable to employees, and as a matter of first impression, the Court held that general disclaimer provisions in an employee handbook may not necessarily immunize employers from contractual liability based on specific policy language, particularly relating to compensation. 

Favorable to employers, the Court affirmed that Minn. Stat. §181.13(a) (for non-payment of wages) does not create an independent substantive right to payment of accrued paid time off (PTO) absent a contract between an employer and an employee.

Employee Handbook: Takeaways

Minnesota employers (and those with employees in Minnesota) should review their employee handbook to ensure both that vacation and/or PTO policies are up-to-date with their current practices and that handbook disclaimer language is also updated.

As the Minnesota Supreme Court noted, “Employers are not rendered helpless by our decision. As we have discussed, well-drafted, specific, disclaimers can prevent the formation of contractual rights stemming from employee handbook provisions, including provisions concerning PTO.” 

Based on the Hall decision, savvy employers will take the time to review their Employee Handbook for critical updates.

Please reach out for compliance assistance with the new guidelines.

Minnesota Updates: Minimum Wage

The Minnesota minimum wage increased effective January 1, 2021. The large employer minimum wage increased to $10.08 per hour (from $10.00). The small employer limit increased to $8.21 per hour (from $8.15). A large employer is any enterprise with an annual gross revenue of $500,000 or more. Don’t forget to also update the required Employment Law Poster.

Stay Tuned: More To Come

With employment laws rapidly changing and evolving, it is critical for employers to stay updated on how these changes will impact their employees, operations, and policies.

For more insight on important workplace topics, read our blog post here!