The Extraordinary Extraterritorial Reach of Paid Sick Leave Laws

The Hennepin County judge’s decision last week to enjoin enforcement of the Minneapolis Sick and Safe Time Ordinance against any employer outside the City’s geographic boundaries, i.e., an extraterritorial employer, prompts some further reflection. Just how does a PSL Ordinance give a political subdivision the right to grant PSL benefits to extraterritorial employees and impose obligations on extraterritorial employers?

It starts with the definitions of “employer” and “employee.” For example, the Minneapolis SST definition of “employer” does not include any geographic limitation. An “employee” is someone who works 80 hours a year in Minneapolis.  Put these two definitions together and the Ordinance requires an extraterritorial employer to comply with the Ordinance with regard to any employees it sends into Minneapolis for 80 hours a year.  The judge noted that plaintiffs in the litigation include some with employees who come from places “as far away as China” and work at least 80 hours annually in Minneapolis.globe-1339833_640

It seems impossible for any political subdivision to believe it has the right to dictate the PSL benefit for extraterritorial employees. Whenever I reach “impossible” in my analysis, I remind myself of the White Queen’s retort to Alice, in Alice in Wonderland, about believing the impossible: “Why, sometimes I’ve believed as many as six impossible things before breakfast,” she said. I suspect Minneapolis merely copied this extraterritorial concept from the long list of other PSL laws that have it.

The concept raises some questions.  Does the extraterritorial employee accrue PSL only while working in the PSL jurisdiction or everywhere that employee works? Can the extraterritorial employee use accrued PSL when working or scheduled to work somewhere other than the PSL jurisdiction? San Francisco and New York clarify that employees accrue PSL only for hours worked within the respective jurisdiction and can use that time only when scheduled to work in San Francisco or New York, as the case may be. Other PSL’s are silent on these issues.

At what rate does the extraterritorial employer calculate an extraterritorial employee’s accrual if the employee is a covered employee under multiple PSL laws?  A regular business traveler may be a covered employee under multiple PSL laws, with varying accrual rates.

How does an extraterritorial employer give PSL notice to an extraterritorial employee? Must the extraterritorial employer, say in China, post the Minneapolis Ordinance notice at its Chinese location so those employees who will spend a few weeks in Minneapolis will see it? If those same extraterritorial employees are covered employees under other PSL laws, must the Chinese-based employer post each of those PSL notices at is Chinese location?

How does a political subdivision enforce its PSL ordinance against an extraterritorial employer, even a foreign country? Assume our employer in China terminates an extraterritorial employee who is a covered employee under one or more of the PSL laws. Can the extraterritorial employee file a retaliation claim under a PSL law in the United States?

I suspect that not much legislative thought has been given to these questions and, quite honestly, they probably would have continued to be unnoticed if Hennepin County Judge Dickstein had not focused on the extraterritorial issue. My post on the judge’s decision is here.

I have noted the challenge for a multi-jurisdiction employer to comply with PSL laws. Adding this extraterritorial aspect to it would make it extremely impractical, near impossible, for an employer with a mobile workforce to comply. Even the White Queen would have trouble with this one.