A Minnesota business hiring its first employee needs a Minnesota withholding account, an unemployment insurance account, workers’ compensation insurance, a signed written notice of pay terms at the start of employment, a Form I-9, and a report of the hire to the state. The employee completes section 1 of Form I-9 “at the time of hire,” and the employer completes section 2 “within three business days of the hire.” The new-hire report is due “within 20 calendar days of the date of hiring of the employee.” Earned sick and safe time and Minnesota Paid Leave both apply from the first employee. Title VII, the Americans with Disabilities Act, and the Pregnant Workers Fairness Act start at 15 or more employees. Federal reemployment rights for an employee who serves in the uniformed services follow a separate rule in 38 U.S.C. § 4303(4)(A) and 38 U.S.C. § 4312.

Most of these duties come from Minnesota statutes: chapter 176 (workers’ compensation), chapter 181 (employment), chapters 268 and 268B (unemployment insurance and Paid Leave), and chapter 290 (income tax withholding). Federal law adds Form I-9, federal income tax withholding, and federal employment taxes, and the at-will terms in an offer letter rest on Minnesota common law. This guide assumes the worker is an employee. If you are still deciding, my page on whether a worker is an employee or an independent contractor covers that test. This page is part of my Minnesota employment law practice materials for employers.

What should a Minnesota business set up before the first payroll?

Before the first paycheck, a Minnesota employer should open a state withholding account and an unemployment insurance account, set up federal withholding and federal employment taxes, and plan for quarterly Minnesota Paid Leave premiums. Each account has its own statute and its own agency.

  • Minnesota withholding. Under Minn. Stat. § 290.92, subd. 2a, “Every employer making payment of wages shall deduct and withhold upon such wages a tax as provided in this section.” Subdivision 24 requires an employer to apply for a withholding account number “on or before the date the employer is required to withhold Minnesota taxes under this section,” and “No fee shall be charged for the application.” The application goes to the commissioner of revenue. Federal law imposes the parallel duty in 26 U.S.C. § 3402(a).
  • Federal employment taxes. Federal law also requires the employer to collect the employee’s Social Security and Medicare tax “by deducting the amount of the tax from the wages as and when paid” under 26 U.S.C. § 3102(a). It also imposes on every employer its own tax “with respect to having individuals in his employ” for Social Security and Medicare under 26 U.S.C. § 3111. Federal unemployment tax under 26 U.S.C. § 3301 falls “on every employer (as defined in section 3306(a))” for each calendar year. Paragraph (1) of 26 U.S.C. § 3306(a), headed “In general,” defines that employer as one that “(A) during any calendar quarter in the calendar year or the preceding calendar year paid wages of $1,500 or more, or (B) on each of some 20 days during the calendar year or during the preceding calendar year, each day being in a different calendar week, employed at least one individual in employment for some portion of the day.” For agricultural labor, paragraph (2) sets a separate test: wages “of $20,000 or more for agricultural labor” in a calendar quarter, or “at least 10 individuals in employment in agricultural labor” on each of some 20 days in different calendar weeks.
  • Unemployment insurance. Under Minn. Stat. § 268.035, subd. 14, an employer is “any person that has had one or more employees during the current or the prior calendar year.” Minn. Stat. § 268.042, subd. 1 requires registration “upon or before the submission of its first wage detail report,” and Minn. Stat. § 268.044, subd. 1 requires that report every quarter. Both go to the Minnesota Department of Employment and Economic Development (DEED).
  • Family employees. Minnesota unemployment insurance treats as noncovered “employment of an individual by a son, daughter, or spouse, and employment of a child under the age of 18 by the child’s father or mother” under Minn. Stat. § 268.035, subd. 20, the federal definition of employment for Social Security and Medicare tax excludes “service performed by a child under the age of 18 in the employ of his father or mother” under 26 U.S.C. § 3121(b)(3)(A), and the federal unemployment tax definition excludes “service performed by an individual in the employ of his son, daughter, or spouse, and service performed by a child under the age of 21 in the employ of his father or mother” under 26 U.S.C. § 3306(c)(5).
  • Paid Leave premiums. Under Minn. Stat. § 268B.14, subd. 1, premiums “accrue and become payable by each employer, except for an employer with an approved private plan under section 268B.10,” and “Each employer must pay premiums quarterly, at the premium rate defined under this section, on the taxable wages paid to each employee.” DEED computes the premium from a quarterly wage detail report, and the employer pays at least the minimum share that subdivisions 3 and 5a set, as the Paid Leave section below explains. An approved private plan covering only one of the two benefit programs does not end premiums: subdivision 6 sets a rate “(2) for an employer participating in only the medical benefit program and with an approved private plan for the family benefit program, 0.4 percent; and (3) for an employer participating in only the family benefit program and with an approved private plan for the medical benefit program, 0.3 percent.”

When I form a company, I often suggest that the owner have the company’s CPA set up the Minnesota state tax account once the first employee is hired. A CPA or payroll provider can handle these registrations and the recurring filings that follow.

When does Minnesota require workers’ compensation insurance?

Minnesota requires workers’ compensation insurance from the first covered employee. Every employer liable to pay compensation must insure that liability with an authorized carrier or obtain a written order from the commissioner of commerce allowing it to self-insure.

Under Minn. Stat. § 176.011, subd. 10, “Employer” means “any person who employs another to perform a service for hire.” Minn. Stat. § 176.181, subd. 2 then provides that every employer “liable under this chapter to pay compensation shall insure payment of compensation with some insurance carrier authorized to insure workers’ compensation liability in this state,” unless the employer obtains “a written order from the commissioner of commerce exempting the employer from insuring liability for compensation and permitting self-insurance of the liability.”

The statute sets these consequences for an employer without coverage:

  • Penalty. Subdivision 3 lets the commissioner order an uninsured employer “to pay a penalty of up to $1,000 per employee per week during which the employer was not in compliance.”
  • Personal exposure. For that penalty, “the term “employer” includes any owners or officers of a corporation who direct and control the activities of employees.”
  • Crime. Under subdivision 4, “any employer willfully and intentionally failing to comply with the provisions of subdivision 2 is guilty of a gross misdemeanor.”
  • Injury while uninsured. Under Minn. Stat. § 176.183, subd. 1, the injured employee still receives benefits “from the special compensation fund,” and “An action to recover benefits paid shall be instituted unless the commissioner determines that no recovery is possible.”

I suggest binding the policy before the employee’s first day, because the penalty is counted for each week without coverage. Some owners and their relatives fall outside the workers’ compensation statute, as the questions below explain.

How does new-hire reporting work in Minnesota?

A Minnesota employer must report each new employee to the state within 20 calendar days of the date of hiring. A copy of the employee’s federal Form W-4 can serve as the report.

Minn. Stat. § 142A.29, subd. 3 provides: “Employers doing business in this state shall report to the commissioner of children, youth, and families the hiring of any employee who resides or works in this state to whom the employer anticipates paying earnings. Employers shall submit reports required under this subdivision within 20 calendar days of the date of hiring of the employee.” Subdivision 1 defines the date of hiring as “the earlier of: (1) the first day for which an employee is owed compensation by an employer; or (2) the first day that an employee reports to work or performs labor or services for an employer.” The clock therefore starts with paid training or a first shift, not the first payday.

Two practical points follow from the statute:

  1. How to report. Under subdivision 4, “Employers may report by delivering, mailing, or telefaxing a copy of the employee’s federal W-4 form or W-9 form or any other document that contains the required information,” or by other means the commissioner authorizes.
  2. Short-term hires. “Employers are not required to report the hiring of any person who will be employed for less than two months’ duration; and will have gross earnings less than $250 per month.”

Older guides cite this duty by its former number, 256.998; the legislature renumbered it as section 142A.29. Minnesota’s report carries out the federal requirement in 42 U.S.C. § 653a(b) that “each employer shall furnish to the Directory of New Hires of the State in which a newly hired employee works, a report that contains the name, address, and social security number of the employee.”

What written pay notice must a new Minnesota employee receive?

At the start of employment, a Minnesota employer must give each employee a written notice of pay terms and keep a copy the employee signed. The notice covers pay rate and basis, paid time off, exempt status, deductions, the pay period and first payday, and the employer’s legal name, address, and phone number.

Minn. Stat. § 181.032, paragraph (d), provides: “At the start of employment, an employer shall provide each employee a written notice containing the following information.” The required items include:

  1. “the rate or rates of pay and basis thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method, and the specific application of any additional rates”
  2. “paid vacation, sick time, or other paid time-off accruals and terms of use”
  3. “the employee’s employment status and whether the employee is exempt from minimum wage, overtime, and other provisions of chapter 177, and on what basis”
  4. “a list of deductions that may be made from the employee’s pay”
  5. “the number of days in the pay period, the regularly scheduled pay day, and the pay day on which the employee will receive the first payment of wages earned”
  6. any allowances claimed for meals and lodging, and the employer’s legal and operating names, main office address, and telephone number

Paragraph (e) adds three steps. “The employer must keep a copy of the notice under paragraph (d) signed by each employee acknowledging receipt of the notice.” The English version must include the commissioner’s text telling employees they may request the notice in another language, and “If requested, the employer shall provide the notice in the language requested by the employee.” Under paragraph (f), “An employer must provide the employee any written changes to the information contained in the notice under paragraph (d) prior to the date the changes take effect.”

Three related rules shape the first payroll. Minn. Stat. § 181.101 requires the employer to “pay all wages, including salary, earnings, and gratuities earned by an employee at least once every 31 days” on “a regular payday designated in advance by the employer.” For a new employee, “Unless paid earlier, the wages earned during the first half of the first 31-day pay period become due on the first regular payday following the first day of work.” Minn. Stat. § 181.032, paragraph (a), requires an earnings statement at the end of each pay period. Minn. Stat. § 177.30 requires records of hours worked and “a copy of the notice provided to each employee as required by section 181.032, paragraph (d), including any written changes to the notice under section 181.032, paragraph (f).”

The minimum wage under Minn. Stat. § 177.24, subd. 1 is adjusted for inflation, and “The new minimum wage rates determined under this paragraph take effect on the next January 1.” Under Minn. Stat. § 181.171, subd. 1, an employee may sue directly in district court over violations of the notice and pay-frequency sections. I suggest keeping the pay notice as its own one-page form rather than folding it into the offer letter, because the statute requires a signed acknowledgment and the commissioner’s language-request text. When employment ends, different timing rules apply, covered in my page on final paycheck rules.

How do sick and safe time and Minnesota Paid Leave apply to one employee?

Both apply from the first employee. Earned sick and safe time accrues from the first day for an employee you anticipate will work at least 80 hours a year in Minnesota. Paid Leave premiums accrue on the wages of an employee in covered employment, “except for an employer with an approved private plan under section 268B.10.” An employer that owes premiums pays at least the statute’s minimum share, and a separate rate applies when its approved private plan covers only one of the two benefit programs.

Earned sick and safe time. Under Minn. Stat. § 181.9445, subd. 6, an employer is “a person who has one or more employees,” so the law reaches a business with a single employee. Subdivision 5 covers any employee, including a temporary or part-time one, whom the employer anticipates will “perform work for at least 80 hours in a year for that employer in Minnesota.” Under Minn. Stat. § 181.9446, “An employee accrues a minimum of one hour of earned sick and safe time for every 30 hours worked up to a maximum of 48 hours of earned sick and safe time in a year,” unless the employer agrees to more. The leave “begins to accrue at the commencement of employment of the employee,” so it starts with the first shift. Under subdivision 4 of section 181.9445, the leave is “paid at the same base rate as an employee earns from employment,” with the statute’s exclusions for items such as overtime premiums. The employer’s paperwork duties are in Minn. Stat. § 181.9447:

  • Notice at hire. Subdivision 9 requires a notice “in English and the primary language of the employee” at commencement of employment, telling the employee, among other things, “that each employee has the right to file a complaint or bring a civil action if earned sick and safe time is denied by the employer or the employee is retaliated against for requesting or using earned sick and safe time.”
  • Handbook. “An employer that provides an employee handbook to its employees must include in the handbook notice of employee rights and remedies under this section.”
  • Pay statements. Under subdivision 10, at the end of each pay period the employer must state the employee’s available and used hours.

My page on earned sick and safe time compliance covers the rest of the statute.

Minnesota Paid Leave. Under Minn. Stat. § 268B.01, subd. 18, an employer includes any entity “having any individual in covered employment.” Covered employment generally means work of which “50 percent or more of the employment during the calendar year is performed in Minnesota,” and it excludes independent contractors and seasonal employees as the statute defines them. On premiums:

  • Shares. Under Minn. Stat. § 268B.14, subd. 3, “employers must pay a minimum of 50 percent of the annual premiums paid under this section.” The employee pays the remainder, if any, through a wage deduction, which belongs in the pay notice’s list of deductions.
  • Small employers. Subdivision 5a gives a reduced rate, “75 percent of the annual premium rate,” to an employer that “has 30 or fewer employees” and whose average wage “is less than or equal to 150 percent of the state’s average wage in covered employment for the basis period.” Under subdivision 7, “the commissioner must adjust the annual premium rates for the following calendar year,” so check DEED’s current figure. At that reduced rate, “employers must pay a minimum of 25 percent of the rate calculated in subdivisions 6 and 7,” and “employees must pay the remaining portion due under this subdivision, if any, of the premium not paid by the employer.”
  • Notices. Minn. Stat. § 268B.26 requires an individual written notice to each employee “not more than 30 days from the beginning date of the employee’s employment, or 30 days before premium collection begins, whichever is later,” using information the department provides. Under paragraph (b), “Delivery is made when an employee provides written or electronic acknowledgment of receipt of the information,” and if the employee refuses to acknowledge receipt, “an employer must be able to demonstrate the way the employee had been notified.”

Minn. Stat. § 268B.09, subd. 1 bars retaliation against an employee “for requesting or obtaining benefits or leave.” My page on Minnesota Paid Leave obligations covers the program in more detail.

What workplace posters does a Minnesota employer need?

The Minnesota posters an employer with one employee needs include the state minimum wage summary, the Paid Leave workplace notice, the unemployment insurance notice, the workers’ compensation notice, the age discrimination notice, and the Minnesota OSHA safety and health poster. Federal law adds the USERRA notice, the polygraph protection notice, and, for an employee covered by federal minimum wage rules, the federal minimum wage notice. Posting is also one permitted way to give the earned sick and safe time notice.

  • Minimum wage. Minn. Stat. § 177.31 provides: “The employer must post the summaries in a conspicuous and accessible place in or about the premises in which any person covered by sections 177.21 to 177.44 is employed.” The Minnesota Department of Labor and Industry “shall furnish copies of the summaries and rules to employers without charge,” and “The commissioner may fine an employer up to $200 for each failure to comply with this section.”
  • Paid Leave. Under Minn. Stat. § 268B.26, “Each employer must post in a conspicuous place on each of its premises a workplace notice prepared by the commissioner providing notice of benefits available under this chapter.” The notice “must be in English and each language other than English which is the primary language of five or more employees or independent contractors of that workplace, if such notice is available from the department.”
  • Unemployment insurance. Under Minn. Stat. § 268.068, “Each employer must post and maintain printed statements of an individual’s right to apply for unemployment benefits in places readily accessible to workers in the employer’s service.”
  • Workers’ compensation. Under Minn. Stat. § 176.139, subd. 1, “All employers required or electing to carry workers’ compensation coverage in the state of Minnesota shall post and display in a conspicuous location a notice” in a form the commissioner approves.
  • Age discrimination. Under Minn. Stat. § 181.81, subd. 1, paragraph (b), “Every employer shall post in a conspicuous place a notice written or approved by the commissioner of labor and industry stating that the mandatory retirement age is age 70,” and paragraph (d) applies the definitions in Minn. Stat. § 363A.03, whose subdivision 16 provides that “Employer” means “a person who has one or more employees.”
  • Workplace safety. Under Minn. R. 5210.0420, subp. 1, each employer must “post and keep posted the” Department of Labor and Industry’s “Safety and Health Protection on the Job” poster, and Minn. Stat. § 182.651, subd. 7, defines an employer as “a person who employs one or more employees.”
  • USERRA. Under 38 U.S.C. § 4334(a), “Each employer shall provide to persons entitled to rights and benefits under this chapter a notice of the rights, benefits, and obligations of such persons and such employers under this chapter,” and the requirement “may be met by the posting of the notice where employers customarily place notices for employees.”
  • Polygraph protection. The Employee Polygraph Protection Act notice requirement is in 29 C.F.R. § 801.6.
  • Federal minimum wage. Under 29 C.F.R. § 516.4, “Every employer employing any employees subject to the Act’s minimum wage provisions shall post and keep posted a notice explaining the Act, as prescribed by the Wage and Hour Division, in conspicuous places in every establishment where such employees are employed,” meaning the federal Fair Labor Standards Act.
  • Sick and safe time. Minn. Stat. § 181.9447, subd. 9, allows the hiring notice to be given by “posting a copy of the notice at each location where employees perform work and where the notice must be readily observed and easily reviewed by all employees performing work,” by a paper or electronic copy, or by “a conspicuous posting in a web-based or app-based platform through which an employee performs work.”

My page on required Minnesota workplace posters covers the poster requirements in more detail. For an employee who works remotely, I suggest delivering each notice electronically as well, because the posting rules speak of premises and work locations.

How does Form I-9 verification work for a first hire?

Federal law requires every employer, including one with a single employee, to verify each new hire’s identity and work authorization on Form I-9. The employee completes section 1 at the time of hire, and the employer examines the documents and completes section 2 within three business days.

8 U.S.C. § 1324a(a)(1) makes it unlawful “to hire for employment in the United States an individual without complying with the requirements of subsection (b),” the verification system. The regulation sets the steps in 8 C.F.R. § 274a.2:

  1. The employee completes section 1 of the form “on the Form I-9 at the time of hire and signs the attestation with a handwritten or electronic signature.”
  2. The employer must examine the documents and complete section 2 “within three business days of the hire.”
  3. The employer keeps the form “three years after the date of the hire or one year after the date the individual’s employment is terminated, whichever is later.”

The regulation also warns that an employer “should not, however, copy or electronically image only the documents of individuals of certain national origins or citizenship statuses.” I suggest putting Form I-9 on the first-day checklist with the pay notice, because section 1 is due at the time of hire. The same checklist should include the pregnancy and parenting rights notice, because under Minn. Stat. § 181.939, subd. 3, “An employer shall inform employees of their rights under this section at the time of hire,” and an employer with a handbook “must include in the handbook notice of employee rights and remedies under this section.” My page on a late Form I-9 covers what to do if the deadline passes.

What should a first offer letter say in Minnesota?

A Minnesota offer letter for a first hire should state that employment is at will, match the pay terms in the written pay notice, and leave out any noncompete, which Minnesota law makes void. A confidentiality agreement and a customer nonsolicitation agreement remain available.

At-will employment means either side may end the relationship at any time. In Grouse v. Group Health Plan, Inc., 306 N.W.2d 114 (Minn. 1981), the Minnesota Supreme Court found no contract for the at-will job at issue. It explained: “On these facts no contract exists because due to the bilateral power of termination neither party is committed to performance and the promises are, therefore, illusory.” The same decision held an employer to a firm offer after the candidate resigned his job in reliance on it, as the questions below explain. Minnesota courts have long recognized that employee handbook language can create contract obligations, so the at-will statement in the offer letter and in any later handbook should match. My page on writing an employee handbook covers that drafting.

Three statutes shape the letter:

  1. No noncompete. Under Minn. Stat. § 181.988, subd. 2, “Any covenant not to compete contained in a contract or agreement is void and unenforceable.” Subdivision 1 provides that a covenant not to compete “does not include a nondisclosure agreement, or agreement designed to protect trade secrets or confidential information,” and does not include “a nonsolicitation agreement, or agreement restricting the ability to use client or contact lists, or solicit customers of the employer.”
  2. Background questions. Under Minn. Stat. § 364.021, a private employer “may not inquire into or consider or require disclosure of the criminal record or criminal history of an applicant for employment until the applicant has been selected for an interview by the employer,” or before a conditional offer if there is no interview. Employers with a statutory duty to check criminal history are excepted.
  3. Pay terms. The offer letter can repeat the pay terms, but it does not replace the signed notice that Minn. Stat. § 181.032 requires.

Promises made while recruiting a first hire can become obligations. One owner asked me to put in writing a promise, made when hiring a first employee, of a future chance to buy part of the business. I suggest stating any such promise in exact written terms or leaving it out of the hiring conversation, because the written terms are what each side can point to later. My page on offer letters in Minnesota covers the rest of the letter.

Which Minnesota and federal laws start at higher headcounts?

Most Minnesota laws in this guide apply from the first employee, but the table shows later starts for disability accommodation (15 employees), bone marrow donation leave (20 at one site), and pay transparency (30 in Minnesota), and the Paid Leave small-employer rate ends above 30. The main federal thresholds are 15 employees (Title VII, the Americans with Disabilities Act, and the Pregnant Workers Fairness Act), 20 (age discrimination and federal COBRA), 50 (the Family and Medical Leave Act and the Affordable Care Act employer mandate), and 100 (WARN notices and EEO-1 reports).

Employees Law What starts Source
1 Minnesota Human Rights Act Discrimination rules for an employer with “one or more employees” Minn. Stat. § 363A.03, subd. 16
1 Pregnancy accommodation and lactation breaks Reasonable accommodation for pregnancy and childbirth, unless undue hardship; an employer may not “claim undue hardship” for “(1) more frequent or longer restroom, food, and water breaks; (2) seating; and (3) limits on lifting over 20 pounds” Minn. Stat. § 181.939
1 Pregnancy and parenting leave Unpaid leave up to 12 weeks Minn. Stat. § 181.940, subd. 3; § 181.941
1 Personnel records Employee rights to review personnel records Minn. Stat. § 181.960, subd. 3
1 Minnesota health coverage continuation Continuation rights under insured group health coverage Minn. Stat. § 62A.16; § 62A.17
1 Uniformed Services Employment and Reemployment Rights Act Reemployment rights after uniformed service; an employer is any entity “that pays salary or wages for work performed” 38 U.S.C. § 4303(4)(A); 38 U.S.C. § 4312
15 Title VII; Americans with Disabilities Act; Pregnant Workers Fairness Act Federal discrimination and accommodation rules 42 U.S.C. § 2000e(b); 42 U.S.C. § 12111; 42 U.S.C. § 2000gg
15 Minnesota Human Rights Act accommodation Reasonable accommodation for disability, unless undue hardship Minn. Stat. § 363A.08, subd. 6
20 Age Discrimination in Employment Act Federal age discrimination rules 29 U.S.C. § 630(b)
20 Federal COBRA Health plan continuation coverage 29 U.S.C. § 1161(b)
20 at one site Bone marrow donation leave Paid leave for donation Minn. Stat. § 181.945, subd. 1
30 in Minnesota Pay transparency Salary range and benefits in job postings Minn. Stat. § 181.173
Over 30 Paid Leave small-employer rate The reduced premium rate is no longer available Minn. Stat. § 268B.14, subd. 5a
50 Family and Medical Leave Act Federal family and medical leave for eligible employees 29 U.S.C. § 2611
50 full-time, including equivalents Affordable Care Act employer mandate Offer coverage or face an assessment 26 U.S.C. § 4980H
100 WARN Act Advance notice of plant closings and mass layoffs 29 U.S.C. § 2101
100 EEO-1 report Workforce data report (Standard Form 100) 29 C.F.R. § 1602.7

Each law counts employees its own way. Title VII counts an employer with “fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” The Family and Medical Leave Act excludes an employee at a worksite with fewer than 50 employees “if the total number of employees employed by that employer within 75 miles of that worksite is less than 50.” The Affordable Care Act looks to “an average of at least 50 full-time employees on business days during the preceding calendar year,” and for that count it adds “a number of full-time employees determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120.” WARN counts “100 or more employees, excluding part-time employees,” or an hours-based alternative. Federal COBRA does not apply to a plan whose employers “normally employed fewer than 20 employees on a typical business day during the preceding calendar year.” Minnesota’s continuation statute, by contrast, applies to “all group insurance policies or group subscriber contracts providing coverage for hospital or medical expenses incurred by a Minnesota resident employed within this state.”

For the rules that apply as a Minnesota workforce grows, my Minnesota HR compliance checklist and my page on Minnesota pay transparency rules go further.

Do I need workers' compensation if my only employee is my spouse or child?

Possibly not, depending on how the business is organized. Minn. Stat. § 176.041, subd. 1, excludes the spouse, parent, and child of a sole proprietor. It also excludes those relatives of an owner-manager of a small limited liability company, or an owner-officer of a closely held corporation, who meets the statute’s ownership, membership, and payroll-hours tests. A non-family employee is covered, and an excluded business may elect coverage under subdivision 1a.

Does a part-time first employee earn sick and safe time?

Yes, if you anticipate the person will work at least 80 hours in a year for you in Minnesota. Minn. Stat. § 181.9445, subd. 5, includes part-time and temporary employees who meet that test. Under Minn. Stat. § 181.9446, the employee accrues at least one hour for every 30 hours worked, up to 48 hours a year, beginning at the commencement of employment.

Can I pay my first worker as a contractor until the business is steady?

Only if the worker is in fact an independent contractor. Minn. Stat. § 181.722 bars a business from failing to classify, represent, or treat an employee as an employee, and an owner or officer who knowingly or repeatedly does so may be held individually liable. Under Minn. Stat. § 181.171, the worker may sue in district court over a violation.

What if I withdraw a job offer after the candidate quits another job?

The candidate may have a claim even though the job was at will. In Grouse v. Group Health Plan, Inc. (Minn. 1981), the Minnesota Supreme Court held an employer to its firm offer under promissory estoppel after the candidate resigned his job in reliance on it. The court reversed and remanded “for a new trial on the issue of damages,” stating that “the measure of damages is not so much what he would have earned from respondent as what he lost in quitting the job he held and in declining at least one other offer of employment elsewhere.”

Can a payroll company take over these filings for me?

A payroll company can do the work, but for Minnesota withholding the legal duty stays with you. Minn. Stat. § 290.92, subd. 25, provides that delegating a withholding duty to an agent “shall not relieve the employer or payor of full compliance with such duty.” I suggest confirming each account is registered in the company’s name and checking the quarterly filings yourself, because the withholding statute keeps that duty with the employer.

Do I have to post a pay range when I advertise my first job?

Not under Minnesota’s pay transparency law until you employ 30 or more employees at one or more sites in Minnesota. Minn. Stat. § 181.173 then requires each job posting to disclose the starting salary range, which the statute defines as a range “based on the employer’s good faith estimate,” and a general description of benefits and other compensation. Below that size, the statute does not apply.

What if my first employee quits or I let them go in the first month?

Minnesota sets different final-pay timing for each. Under Minn. Stat. § 181.13, when an employer discharges an employee, earned and unpaid wages are immediately due upon the employee’s written demand, and the employer is in default if they are not paid “within 24 hours after demand.” Under Minn. Stat. § 181.14, when an employee quits, earned wages are due no later than the first regularly scheduled payday after the final day of employment, unless a collective bargaining agreement provides otherwise. If that payday is “less than five calendar days following the employee’s final day of employment,” payment “may be delayed until the second regularly scheduled payday but shall not exceed a total of 20 calendar days following the employee’s final day of employment.”

Next Steps

A first hire in Minnesota takes a short list of setup steps. Open the withholding and unemployment insurance accounts, plan for Paid Leave premiums, and bind workers’ compensation coverage. Then report the hire, give and keep the signed pay notice, give the pregnancy and parenting rights notice, complete Form I-9, post the required notices, and use an at-will offer letter without a noncompete. Earned sick and safe time and Paid Leave start with the first employee, and the federal headcount laws arrive at 15, 20, 50, and 100. More guidance for employers is in my Minnesota employment law practice materials. If you would like me to draft your offer letter and pay notice, or to set up the first-hire documents for your company, email [email protected] with a brief description of the position and your business.