Why Minneapolis sick leave is on shaky legal ground

The Minneapolis City Council recently voted to require employers to provide paid sick leave to employees. The requirement applies to firms with six or more employees and extends to all employers with employees doing business in Minneapolis.

On top of this being a bad idea that makes it harder to do business in Minneapolis, the City Council likely doesn’t actually have the power to pass this regulation.

Minneapolis is a home rule charter city, which many people assume grants the city broad power to pass any law it wants. The Minnesota Supreme Court has explained that “in matters of municipal concern, home rule cities have all the legislative power possessed by the Legislature of the state.” That seems like pretty broad power, but the breadth applies only to matters of “municipal concern.”

“If a matter presents a statewide problem,” according to the court, “the implied necessary powers of a municipality to regulate are narrowly construed unless the Legislature has expressly provided otherwise.”

Paid sick leave is clearly a matter of statewide concern and, therefore, should not be subject to local regulation. This question was settled in a case where St. Paul tried to force contractors to use Ramsey County residents for any city work. In striking down the regulation, the state Supreme Court concluded that “under the St. Paul charter it would seem that the activity of laborers is a statewide matter and not one for local regulation so long as the activity is not inherently dangerous to the health, welfare, safety or morals of the people of the city.”

It’s easy to see why the state limits a city’s power to matters of local concern.

In another case, the court rejected an attempt by Brooklyn Center to license boats after concluding that the lake-studded geography of Minnesota made licensing an issue of statewide concern. Imagine if everyone who owned a boat needed a different license to launch from city to city. Likewise, imagine if Minnesota’s 107 home rule charter cities each passed its own version of paid sick leave. As the court explained in the boat-licensing case, the burden resulting from such multiplicity of rules would be “both unreasonable and absurd.”

To avoid these absurdities, a city can pass a law on issues of statewide concern only when it is given explicit authority from the state.

Minneapolis no doubt will argue that the ordinance is localized to jobs within the city limits. But the ordinance works to guarantee sick leave benefits to tens of thousands of people who live in the suburbs and commute to one of the 158,000 jobs in downtown Minneapolis. Thus, the presumed benefits of the ordinance apply regionally, not locally.

Even if a court were to conclude that sick leave did present a matter of local concern, the question then would turn to whether state law pre-empts, or overrides, the Minneapolis ordinance.

The pre-emption of city laws can be express or implied. Pre-emption of a local law will be implied if a court determines that state law already occupies the field of legislation. In making this determination, a court will ask: “Has the subject matter been so fully covered by state law as to have become solely a matter of state concern?”

Minnesota statutes provide a comprehensive set of provisions on the specific subject of employee leave, including the following: leave for pregnancy, parenting, adoption, school conferences, bone-marrow donations, organ donations, blood donations or civil air patrol service; leave for family members of service members killed or injured, for military ceremonies and, most important, sickness. The fullness of the statute is rounded out with provisions on enforcement, a requirement on the posting of employee rights and remedies for any violations.

Alone, the comprehensiveness of these statutory provisions should lead a court to conclude that employee leave is solely a matter of state concern.

However, a court will also ask: “Is the subject matter itself of such a nature that local regulation would have unreasonably adverse effects upon the general populace of the state?” A multiplicity of paid sick leave requirements, as already noted, would pose an unreasonable burden on businesses across the region.

This review of the law shows that the city’s legal authority to regulate paid sick leave rests on very shaky legal ground.

Notably, a very similar legal analysis applies to whether Minneapolis can raise the minimum wage to $15, another controversial issue.

The Star Tribune has reported that the city attorney has reached some legal conclusions on the minimum-wage question — conclusions that could have informed the debate over paid sick leave — but these conclusions are not yet public and may not be made public.

Peter J. Nelson is vice president and senior policy fellow of the Center of the American Experiment.