The 2024 legislative session in Minnesota ended on May 19, 2024 and brought some changes to the tax law as well as multiple changes to employment law that employers should be aware of. The following summarizes the major changes to be aware of.

1. Net Operating Loss Deduction

Corporations will be limited to a net operating loss deduction of 70% of taxable income for tax years beginning after December 31, 2023. This limitation is down from the 80% limitation previously in effect.

2. Earned Sick and Safe Time

The Minnesota legislature created additional legislative penalties against employers that fail to comply with the sick and safe time laws that took effect on January 1, 2024. The new law creates a penalty for an employer that fails to allow the use of or provide the prescribed sick and safe time. The penalty is equal to the amount of time that was not allowed or provided plus the same amount as damages. Similarly, the law creates a penalty for employers that fail to maintain records to determine if an employee was provided with sick and safe time. This penalty is 48 hours per year plus an equal amount as damages.

3. Minnesota Paid Leave

In the prior session, Minnesota established paid leave rules that will take effect on January 1, 2026. The 2024 legislation increases the related payroll tax from 0.7% to 0.88%, provides guidance on leave periods, and provides additional administrative clarifications. Importantly, the 2024 law also provides reduced premiums for small employers (defined as 30 or fewer employees and for which the average wage for the employer is less than or equal to 150% of the state’s average wage). For these employers, the premium will be 75% of the normal premium rate.

4. Employee Misclassification

Starting July 1, 2024, officers or agents who engage in activities that incorrectly classify employees as nonemployees can be deemed personally liable for penalties. The penalties can be up to $10,000 for each misclassified person and $1,000 for each person that obstructs an investigation into employment classification.

 5. Salary Ranges

Beginning January 1, 2025, employers with 30 or more employees in Minnesota must include a salary range and benefits description in job postings. This requirement applies to all job postings made by the employer directly or through third parties and independent of how published.

If you have any questions about these changes, please contact your Boyum advisor.