Today's post comes to us courtesy of Justin Schwam, an associate in the Labor and Employment Department in Roseland:
With the trend of local paid sick leave ordinances continuing its progressive sweep in cities across the country, a consistent concern for companies located in the vicinity is whether their operations fall within the local law's reach. Does it only apply if the company is physically located in the city? Or does any employee activity within the city trigger the often onerous recordkeeping obligations?
A few weeks ago, a Minneapolis judge limited the reach of the City's law slated to go into effect later this year. Judge Dickstein issued a temporary injunction against the enforcement of its Ordinance against businesses not physically located in the City. Although the City argued that its exclusive enforcement authority meant that it would not apply the Ordinance against businesses outside the City, the court recognized that such assurances, "however sincere," did not alter the Ordinance's plain language.
The court's analysis of this issue is also notable for its dissection of the City's argument that its action was a permissible exercise of its police powers to protect the health and welfare of residents. The court found that the City's attempt to regulate extraterritorial businesses whose employees "are unlikely (or may never) enter the city while sick" was not a narrowly tailored means of addressing "identifiable harms within the city limits," such as a rule governing the inspection of extra-territorial cows whose milk was sold within the city. Because a prime justification for these local ordinances is typically the need to protect residents from the spread of contagion, the court's refusal to accept policymakers' assumptions that ill workers would use the sick leave benefit to "protect against potential harm" is significant.
Although the injunction ultimately may be lifted, or the ordinance amended – it's not scheduled to take effect until July 1, 2017 – employers not located in Minneapolis are breathing a sigh of relief. For now, employees who occasionally travel to Minneapolis will not be entitled to accrue sick leave under the law.
As local action on this issue will no doubt continue to pick-up steam, since more state governments are looking at measures to prevent municipal action than are moving to enact state-wide measures, it will be interesting to see how cases like this one influence future legal challenges and how future paid sick leave laws are drafted. We will keep an eye out and report back on any developments.
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