Earned safe and sick time goes into effect, providing Minnesotans with guaranteed sick leave

CATHY WURZER: The New Year means a bundle of new laws have gone into effect in Minnesota. A new law that will probably affect the most people, something called earned safe and sick time. It requires employers in Minnesota to provide employees one hour of paid sick time for every 30 hours worked. It's capped at 48 hours every year.

To do the math for you, that means after six weeks, a worker could be eligible for an eight-hour day off. We're going to look at the employer and employee impact. Joining us right now is Patricio Cambias. He's the lead organizer for CTUL. That's a workplace advocacy organization based here in Minnesota. Patricio, thanks for joining us.

PATRICIO CAMBIAS: Thank you. Thank you for having me.

CATHY WURZER: What are you hearing about this new law? Are workers familiar with it?

PATRICIO CAMBIAS: Yes, workers who live and work in Minneapolis, St. Paul, Bloomington, where local ordinances already offer these benefits, have been able to enjoy them and benefit from them. And now they have family members and friends and family who live outside of the Twin Cities statewide who will also now be able to enjoy them.

CATHY WURZER: Tell me a little bit about the stories you're hearing from workers who have had the opportunity to partake in this program. How are they being affected by it?

PATRICIO CAMBIAS: Yeah, we've had workers who have been advocating for this law for years. One example, we have a worker named Ursula, who worked downtown. She went 19 years without taking a single vacation. And she would find herself literally praying not to fall sick because of how little she was paid any time off away from work and falling behind on rent and bills. And because there was no guaranteed paid sick time, these are the choices that she was forced to make, raising her family, you know.

And we know that it's inevitable to become sick. Especially since the pandemic, public health has been a major concern. And low wage workers, they've had to make this choice of either going to the doctor at the risk of falling behind on your bills or force oneself to go to work sick, potentially endangering others and not having the time to properly recuperate. There's countless stories of what it's like to go without paid sick time and safety time as well. There is--

CATHY WURZER: Is--

PATRICIO CAMBIAS: No, go ahead.

CATHY WURZER: Is this law specifically helping certain segments of the demographic, certain communities of color, perhaps?

PATRICIO CAMBIAS: For sure. I mean, our membership is primarily immigrants, Hispanic immigrants, as well of BIPOC. Yes, workers of color in the Twin Cities who, for the most part, are the ones most marginalized in all of these industries, who received the lowest amount of benefits, the lowest pay, basically have the less freedoms when it comes to their work-life balance and their relationship to employers. So this type of law goes a long way towards evening the playing field and giving workers more options to better take care of their families and their loved ones and themselves.

CATHY WURZER: Will CTUL be in the front lines of making sure that all businesses adhere to this new law if an organization is falling short? What's your role?

PATRICIO CAMBIAS: Sure, I mean, we've been doing worker advocacy for years. We empower workers to elevate their own voices and advocating for themselves and their communities, and yeah, keep employers accountable.

So we've been doing this work for years, and we're in coalition with other groups and local government and now the state government in making sure that businesses outside of the Twin Cities can catch up, and you know, align themselves with the successful businesses in the Twin Cities that have already been carrying out these ordinances successfully. So we're always on the front lines of doing that work.

CATHY WURZER: What kind of education work are you doing in greater Minnesota? I mean, obviously, you've been working in the Twin Cities, as you say. But I'm presuming there's a lot of work to be done in the outstate areas, especially with some of the smaller businesses. What are you doing out there?

PATRICIO CAMBIAS: Well, our task is primarily to educate workers so that workers know their rights, right, and what's entitled to them. And we have outreach programs that target workers outside of the Twin Cities, where we organize events to attend in person, give workshops, presentations, know your rights type events, as well as online, offline type opportunities to reach as many workers as possible.

But yeah, we empower workers to kind of use their own voice to advocate for themselves and their co-workers and help their employers stay accountable. But they have to know their rights. They have to know that this law is now officially in play for everyone in Minnesota, for all working people in Minnesota. And we're going about educating as many people as possible about that.

CATHY WURZER: All right. Patricio, thank you for your time.

PATRICIO CAMBIAS: Thank you very much.

CATHY WURZER: Patricio Cambias is the lead organizer for CTUL. We're going to turn now to a business owner. David Benowitz is the president of Craft and Crew Hospitality, which operates six bars and restaurants in the metro area. He's on the line right now for a look at how business owners and restaurant groups are reacting to the new sick time law. Thanks for joining us, David. How are you?

DAVID BENOWITZ: Hey, Cathy. I'm well. Happy New Year to you.

CATHY WURZER: Happy New Year to you, too. So you've got, what, six restaurants. How many employees do you have?

DAVID BENOWITZ: Yeah, so we have six restaurants. We're opening our seventh this spring, which will bring us to about 300 total employees--

CATHY WURZER: Wow.

DAVID BENOWITZ: --in the peak season, yeah.

CATHY WURZER: OK, so as you know, it's been a job seeker's market here for the past few years, which has made staffing kind of tough for many businesses. How are you doing with that now? And how might the new law affect staffing?

DAVID BENOWITZ: Yeah, I mean, coming especially out of the pandemic for hospitality, it was quite a challenge late 2022 into 2023. Things have gotten better, I'd say, over the past six months, though, with regard to our industry. Depending upon how you are set up, this is a challenge for a lot of restaurants to navigate, not only from an admin standpoint and a tracking standpoint.

Fortunately, for us specifically, back in the beginning of 2023, we put in a new plan for PTO and sick time across all of our restaurants. So we didn't have to make a lot of adjustments as of January 1st because we were already in compliance, but I know that is not the case for a lot of my colleagues in the industry, where they had to get educated on how this was going to be implemented, how it was going to impact their business model and their bottom line, et cetera.

CATHY WURZER: Because you were an early adopter of PTO, how has it been going for you? Have you noticed any effects when it comes to staffing, the bottom line, that kind of thing?

DAVID BENOWITZ: Yeah, it's gone really, really well. Compared to some of my colleagues in the industry, I would say, quarter one, quarter two of 2023, where a lot of them were having a lot of challenges recruiting hospitality staff into their restaurants, we were not seeing that same impact. I'm not saying, you know, our PTO and sick time policy was the only driver of that, but I think that had to do something with it.

It was definitely a competitive advantage, we felt, that we rolled out at the beginning of 2023 to have up to 40 hours, depending upon how many hours you work for the year, for every hourly staff member, which was not seen across the industry at that time, and still, to this day, on the PTO side, obviously, the sick time with the new law. But our staff can utilize the hours for PTO or for safe and sick.

CATHY WURZER: So it sounds like it's been working pretty well. Have you noticed that are you able to retain workers, less turnover, healthier workforce?

DAVID BENOWITZ: Yeah, we have. We have. We've had definitely have had less turnover, definitely more engaged staff because I feel like they get the time off that they deserve. And compared comparatively to 2022, our turnover percentage is down significantly from an hourly standpoint, which this policy impacts the most.

So we've been happy with it, even though it has been an extra cost to the business. We feel that the production of our staff outweighs that because of their overall happiness, job satisfaction, and then, in turn, engagement with the crew internally and then externally with our guests.

CATHY WURZER: So it's a bit of an extra business cost for you as of yesterday. Minimum wage went up in the state of Minnesota, too. So I'm wondering. You seem like you're in a pretty good position, but do you look around and maybe see some of your other colleagues in the industry going by the wayside because of the added costs?

DAVID BENOWITZ: I think anytime there's a new regulation that's put into effect for hospitality, that's going to cost more money. And it cuts into the bottom line of restaurants, and our margins as an industry are very small. The average hospitality group or restaurant has an average profitability of about 5%. And if you look at other industries, that's very small.

So I'm not saying this would be the reason why a restaurant closes, but it could be a lot of things that add up to it. Restaurants are still recovering from COVID-19. And business, for a lot of us, has not come back to those levels. So we're still trying to work hard every day to bring customers in. And I know a lot of restaurants are struggling still. So, yeah, of course, this impacts it. But I can't say this is the reason why a restaurant would go under by any means.

CATHY WURZER: Well, thanks for giving us a look behind the scenes, as it were. I know you're opening a new restaurant soon, so congratulations on that.

DAVID BENOWITZ: Yeah, thanks. Yeah, we're really excited about it. Yeah, it's opening late spring, summer. We took over the old Galaxy Drive-In in St. Louis Park, so we're excited to turn that around into a fun, new concept for that neighborhood. It's a really iconic spot.

CATHY WURZER: Excellent. Well, I hope you have a good year. Thanks so much.

DAVID BENOWITZ: Thank you so much, Cathy. Happy New Year.

CATHY WURZER: Happy New Year. David Benowitz is the president of Craft and Crew Hospitality.