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Thousands in Twin Cities may benefit from new paid sick time rules

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Marty Newman inside his bar, Keegan's pub.
Marty Neumann, owner of Keegan's Pub in northeast Minneapolis, may raise prices to account for a new city ordinance.
Evan Frost | MPR News

Thousands of people in Minneapolis and St. Paul will soon get paid sick leave. 

Ordinances taking effect Saturday in each city require most employers to provide time off so their workers can recover from an illness, take care of a family member or seek help with domestic abuse. 

The laws require employers to give their workers an hour of sick and safe time for every 30 on the clock, up to 48 hours of paid time off each year. 

Pastor Javen Swanson of Gloria Dei Lutheran Church in St. Paul is part of ISAIAH, a clergy group that lobbied for the ordinances. Swanson said paid sick leave is a basic right, and the ordinance will be a big help to an estimated 150,000 workers in Minneapolis and St. Paul. 

"Almost everyone has a story, or knows someone who has a story about struggling without paid sick time or has a story about a time when having paid sick time really saved their lives, where it was absolutely essential that they had access to it," Swanson said.

Pushing the measures through the two city councils was only half the battle, Swanson said. In May, the Republican-led Minnesota Legislature passed a measure that would have nullified city labor ordinances, but DFL Gov. Mark Dayton vetoed it. 

Now with uncertainty about paid sick time gone, some restaurant owners are trying to figure out how it'll affect their balance sheets. 

During the lull between lunch and dinner, Marty Neumann, owner of Keegan's Irish Pub in northeast Minneapolis, said he supports the idea of paid sick time. But it will be a noticeable expense for Keegan's, and Red's Savoy Pizza next door which he also owns. 

Neumann estimates providing mandatory paid time off will cost over $1,200 a month for his 40 employees. In an industry with notoriously thin profit margins, that money will have to come from his customers, he said.

"We have to make sure that our staff is taken care of correctly, but the only way to take care of it is by raising prices," Neumann said.

He's also considering adding a convenience fee for credit card users. 

But not all restaurant owners share Neumann's concerns. Just down the block in northeast Minneapolis, Mike Sherwood of Pizza Nea  said his two full-time employees already get paid time off. Extending that benefit to his eight part-time workers is a cost Sherwood expects to absorb. 

"I don't think it's a big deal. If somebody's sick, they shouldn't be working in a restaurant. It's pretty basic," Sherwood said. "It's what we learned in our food safety classes. They should be paid, just like anybody else."

Dan McElroy with the Minnesota Restaurant Association doesn't think many eateries will tack service charges onto customers' bills.

If workers take all the paid time off they're allowed under the ordinances, he said, it'll increase employers' payroll costs about 3 percent. But that's provided they have staff to cover the shifts.

"If they have to call in replacement staff on overtime, then that time and a half for the replacement means that the total cost could get up in the 7.5 percent range," McElroy said.

The biggest concern for employers now is complying with a $15 minimum wage in Minneapolis, he said, which passed the city council Friday. 

 What to know about sick and safe time laws:

Employers

• Must provide one hour of sick and safe time for every 30 each employee works.

• May limit each employee's accrual to 48 hours per year. 

• May cap unused sick and safe time at 80 hours.

Employees

• May use sick time to treat or recuperate from a medical or mental health condition, illness, or injury, or that of a family member

• To seek help for domestic abuse, sexual assault, or stalking

• Care for a family member during an emergency closure of school or place of care

In Minneapolis

• The ordinance covers employers with six or more workers. Those with five or fewer must provide sick and safe time, but it may be unpaid.

In St. Paul

• The ordinance takes effect July 1 for employers with 24 or more workers.

• For those with 23 or fewer employees, the measure takes effect Jan. 1, 2018.