Minnesota’s Earned Sick and Safe Time (“ESST”) law has now been in effect for more than two years, but the regulatory framework surrounding the law has continued to evolve.

After going into effect on January 1, 2024, the ESST law has been amended by the Minnesota legislature in 2024 and 2025 and is now being impacted by the Minnesota Department of Labor and Industry (“DLI”) Minnesota Rules, parts 5200.1200 to 5200.1209 (the “ESST Rules”).

Since late 2024, DLI has planned to adopt ESST Rules which provide guidance regarding application of the law. The ESST law conferred specific authority upon DLI to “adopt rules to carry out the purposes of this section and sections 181.9445 to 181.9448.” The rulemaking process involved multiple comment periods, a hearing in front of the Court of Administrative Hearings, and reports from Administrative Law Judges regarding modification.

What are Key Areas of Interest in the ESST Rules?

The ESST Rules provide additional guidance and clarification to several key areas of the ESST law, including accrual year, hours worked, time credited and increments of accrual, accrual and advancing methods, employee use, incentives, reasonable documentation, misuse of ESST, and more generous ESST policies. Some of the most highly anticipated clarifications are discussed below:

Hours Worked (Minn. R. 5200.1202)

Of note, the original language for the proposed ESST Rules would have required employers to provide ESST accrual for all hours worked if the employee is anticipated to work more than 50% of their hours in Minnesota. However, this language was struck down after the public hearing and is not reflected in the ESST Rules.

While an “employee” under ESST is still defined as “anticipated to perform work for at least 80 hours in a year for that employer in Minnesota”, the ESST Rules include a “good faith” provision for this determination, which includes evaluating the employee’s anticipated work schedule and location of hours worked in a manner that is not “knowingly false or in reckless disregard of the truth.”

What this means for organizations: Employers operating in multiple states only need to track hours worked in Minnesota for ESST accrual. More good news is that employers are provided with some grace in determining eligibility for employees with the “good faith” provision. However, employers should review their process for consistency in determining ESST eligibility at hire and monitoring employees whose schedules or work locations change during the year.

Incentives (Minn. R. 5200.1206)

The ESST Rules clarify that if an incentive, such as “a bonus, reward, or other incentive is based on the achievement of a specified goal such as hours worked, products sold, or perfect attendance” which the employee did not achieve due to ESST use, the incentive may be denied unless provided to employees on any other leave status.

What this means for organizations: Employers can continue to maintain legitimate, objective incentive programs. However, employers must apply those programs consistently rather than treating employees who use ESST differently from employees on comparable leave.

Misuse of Earned Sick and Safe Time (Minn. R. 5200.1208)

The ESST Rules establish an important carveout for misuse of ESST, which has been a point of concern for many employers since ESST’s inception.

The ESST Rules include definitions of misuse and multiple examples of “a pattern or clear instance of suspected misuse”, which includes, but is not limited to use of ESST on a scheduled work day immediately before or after a scheduled day off, vacation or holiday; use of ESST in increments of 30 minutes or less at the start or end of a scheduled shift; use of ESST on a day where a request for other paid leave was denied; or there is documentation “or other evidence” which conflicts with the employee’s claimed use of ESST.

The ESST Rules clarify that any misuse of ESST is not subject to ESST law’s protections and employees may be subject to discipline. However, an important distinction is that “an employer must not deny an employee the use of [ESST] for a qualifying purpose based on previous misuse of [ESST] by the employee the employer’s suspicion that the employee may misuse [ESST].”

What this means for organizations: Employers now have clear authority to investigate and discipline proven misuse of ESST. However, employers should keep in mind that they cannot make assumptions or deny leave based solely on suspicion or an employee’s prior attendance history. Decisions should be based on objective facts, documented evidence, and a fair investigation.

More Generous Sick and Safe Time Policies (Minn. R. 5200.1209)

The ESST Rules clarify another area of the ESST law which impacts additional paid time off benefits even if not specifically identified as ESST qualifying.

Under the 2023 version of the ESST law, it was possible for an employer to designate a bank of leave as ESST qualifying and any other leave banks, even if used for ESST purposes, would not be job protected under the ESST law. After this law change, we assisted clients with generous leave banks to carve off a portion that would be ESST protected.

In 2024, the legislature modified the ESST law to require “all paid time off and other paid leave made available to an employee in excess of the minimum amount” of required ESST “for absences from work due to personal illness or injury” to “meet or exceed the minimum requirements” of the ESST law, such as a limited ability to inquire the purpose for requested leave. To comply with this change, many employers prohibited use of PTO or personal time (previously non ESST banks) for “personal illness or injury,” which had the goal of continuing to provide generous leave, but also ensuring that employers could manage their operations without all leave receiving ESST protection.

The new rules require organizations to re-think leave yet again. The rules specifically indicate that if leave is allowed to be used for ANY ESST purpose, not just “personal illness and injury” as identified in the statute, then all leave within that bank can be used for ESST purposes.

What this means for organizations: If you offer a leave, like PTO or vacation time, you must change your policy to either (1) prohibit use of the leave for any ESST purpose or (2) bring your leave policy into compliance with the requirements of Minnesota’s ESST law.

What are Next Steps for the ESST Rules?

The new rules took effect on July 6, 2026. DLI has published a new webpage, “FAQs about Earned Sick and Safe Time Rules”, for additional information on the ESST Rules.

These updates to Minnesota law may be difficult or complex to sort through and apply to your employees. Minnesota employers should review their policies, including their employee handbook, and procedures to make sure that they are in compliance with current leave laws and make any adjustments as necessary.

If you have questions about implementation of these changes or your company policies, please contact our Labor & Employment attorneys at (651) 439-2878 or contact@eckberglammers.com