In this edition of WIT AND WISDOM OF WINTHROP, our Employment Litigation Newsletter, we take a look at what’s happening in the news related to the Delta variant and CDC mask recommendations. We also review employment updates to COVID-19 vaccinations, the independent contractor rule, “anti-hacking” law, and non-compete agreements.
The long-awaited Assisted Living Facility Rules have at last been adopted by the Minnesota Department of Health. Providers should immediately review the rules to ensure compliance, especially because the assisted living facility license application requires applicants to attest to having read and understood both Minnesota Statutes Chapter 245G and the newly approved Rules.
View the adopted rules in the Minnesota State Register Volume 46, Number 3.
The long-awaited Provider Relief Fund reporting portal is now open: https://prfreporting.hrsa.gov/s/. Providers who received one or more provider relief fund payments exceeding $10,000 in the aggregate during Period 1 (from April 10, 2020 to June 30, 2020) have until September 30, 2021, to report on the use of those funds. The deadline to use funds from Period 1 was June 30, 2021. Last month, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), released significantly updated reporting requirements. Providers are strongly encouraged to thoroughly review the updated guidance to understand the four new reporting periods, the use of funds deadlines, and the information required to be reported. In addition, HRSA has also released several new resources to assist reporting providers:
HHS continues to emphasize that detecting, combatting and deterring the fraudulent use of Provider Relief Fund distributions remains a high priority. Maintaining complete and accurate records and complying with reporting and auditing requirements are key to avoiding future regulatory scrutiny.
Please contact our team to discuss questions or concerns.
The Legislature has been meeting in special session for two weeks. Twelve budget bills must be passed and signed into law by the end of the month in order to avoid a full or partial government shutdown. Of these, only five bills have been passed by both the House of Representatives and the Senate as of early this morning. None have yet been sent to Governor Tim Walz or signed into law.
Along with the dozen budget bills, the Legislature is also expected to pass bills related to tax expenditures and capital investments. Traditionally, these bills are the last to be passed in a given year. An agreement on the tax bill was previously announced, though some changes are still expected. It is yet to be determined whether the capital investment bill will simply include adjustments to previously-approved projects or be a more robust bill authorizing new projects.
In order to get the budget passed before the end the of month, the Legislature will be meeting in session this weekend. In fact, the House has three bills scheduled for the calendar on Saturday, in spite of the fact that language wasn’t public for most of these until the end of the business day on Thursday. The three bills scheduled for Saturday relate to education, health and human services and a small capital investment bill (new projects may be added).
While agreements have been announced on all budget areas except for public safety, it should be noted that the agreements are not final. Changes have been announced to many of the bills following the announced agreement. It is expected that additional bills will be passed just before the special session ends that will encompass these later changes.
When it was first determined that a special session would be needed to pass the state’s biennial budget, many hoped that the special session would last just a single day. That has proven to be wishful thinking, but legislative leaders continue to insist that the Legislature will finish its work by the end of the month, and avoid a state shutdown.
The legislature began a special session on Monday, June 14, at noon. Special session was necessary for Governor Tim Walz to extend the state’s peacetime emergency due to COVID-19. As has happened numerous times since the peacetime emergency first began, House Republicans brought forward a resolution to terminate it. The resolution failed by a margin of 64-68.
Four budget bills were on the agenda for the House of Representatives on Thursday: Commerce & Energy, Higher Education, Agriculture & Broadband, and Legacy Funding for outdoor and cultural heritage funds. More than 60 amendments were prepared to be offered to the bills, including 28 for the Commerce & Energy bill alone.
The first bill brought up in the House was the Commerce bill, Special Session H.F. 6. After more than twelve hours of discussion, a motion to re-refer the bill to committee was defeated, two amendments had been voted on and a third amendment was offered. At that point, as the clock was nearing midnight, the bill was laid on the table. The other three bills were also laid on the table.
Meanwhile, the Senate debated each of the four bills the House had on the calendar within a few hours, as they had expected the House to pass and send each of them over. Once the House passes the bills, the Senate will be able to officially pass them.
When session was gaveled in on Monday, it was the first time since March of 2020 that the public was able to be in the Capitol while the legislature was in session. Several activists held rallies, reminding everyone in attendance how much the building echoes. However, it was still difficult for the public to interact with elected officials, as the areas in front of the House and Senate Chambers were roped off to all but the elected officials and staff.
Chairs for a few other committees announced that they had reached tentative agreements throughout the week. A bill on taxes has been introduced, and though it was scheduled for a hearing on Thursday, that hearing was postponed until Friday. Agreements on Workforce/Jobs, Housing and Transportation have also been announced, and details are slowly being made public.
While a number of bills are still being negotiated, there are a handful that are likely to have the most controversial details decided by House and Senate leadership, along with the Governor. Among these bills are Public Safety & Judiciary, State Government and Environment.
Protests and unrest have continued in the Uptown area of Minneapolis following the shooting death of Winston Smith earlier this month. Protesters have blocked a road in this busy area, even after blockades had been removed by police, and a woman was killed when a driver intentionally drove into a group of protesters. Governor Walz has put the National Guard on notice that they are likely to be called up soon to help with the situation.
The Minnesota State Capitol opened its doors to the public on Thursday for the first time since closing them last March due to the pandemic. Our client, The Minnesota Association of Resources for Recovery and Chemical Health (MARRCH) was the first advocacy group to hold a press conference in the building. MARRCH called on legislators to invest needed resources into treatment and recovery programs for those dealing with addiction.
The Higher Education working group, composed of senators and representatives who served on the conference committee, met on Wednesday to review the compromise budget bill that is expected to be passed in special session. A Commerce working group was expected to do the same, but had to cancel its meeting because the policy language was not finished being drafted. It is now scheduled to meet on Monday morning. Similar meetings are scheduled for the Legacy (today) and Agriculture/Broadband (Monday) working groups.
On Thursday, Brian Bakst of Minnesota Public Radio reported that legislative negotiators had wrapped up agreement on the tax bill. Leaders had previously announced that federal conformity on the Paycheck Protection Program (PPP) loan forgiveness and unemployment insurance would be included in the agreement. Yesterday, Speaker of the House Melissa Hortman (DFL-Brooklyn Park) stated that an extension of the historic tax credit was also part of the deal.
The state collected 119% more general fund revenues than was projected in May, bringing in $3.306 billion in the month. Because tax filing deadlines were shifted from April to May, it was expected that revenues would exceed projections. Even accounting for this shift, receipts for the fiscal year are still 10.4% more ($2.17 billion) than projected. Unless a new official forecast is completed, which is not expected, excess revenues will not be available for the legislature to spend until the 2022 legislative session.
The legislature will be back for its first special session of 2021 on Monday, June 14, as Governor Tim Walz renews his emergency powers. Although he has indicated that he hopes the need for the peacetime emergency will come to an end, it is likely that the legislature will be back in July to repeat the exercise. Although legislative leaders had originally hoped that Monday’s special session would only last one day, the legislature is now expected to be in session until the budget is passed, which is expected to happen prior to July 1.
Today marks the day that Governor Tim Walz and legislative leaders gave committees to finalize budget allocations for their respective jurisdictions. Capitol insiders are not surprised that many committees will miss today’s deadline. From the outset, several committee chairs privately indicated that they viewed the deadline as aspirational rather than a set deadline.
Even committees that have completed their work aren’t making the information public. There are no committee meetings scheduled today (or in the next week), and there have only been two budget-related public meetings all week. It is likely that no documents related to the state’s budget will be made available to the public prior to private approvals by legislative leaders and the Governor.
Next Friday, June 4, is the deadline for policy decisions, and the legislature is still planning to meet in special session on June 14, when the Governor is expected to reauthorize his emergency powers. The most important date to remember is June 30. If the legislature doesn’t pass a budget prior to that date, the state will begin a shutdown. Expect that if committees are unable to find agreement that leadership will step in and make final decisions in order to avoid a shutdown.
This week the state judicial branch released new guidance regarding COVID-19 safety requirements as a new statewide order expands in-person court proceedings. Changes take place beginning on June 14.
Beginning today, nearly all statewide COVID-19 restrictions have been lifted. Capacity limits on indoor and outdoor spaces have been lifted, as well as most mask mandates. Masks are still required on public transportation, in certain jurisdictions (including the City of Minneapolis and the City of St. Paul), and certain businesses. This week, the state also announced a series of incentives for people to get vaccinated, ranging from free tickets to the State Fair to free drinks provided by breweries during on-site vaccination clinics.
As expected, Minnesota’s regular legislative session ended on Monday without passage of the state’s next biennial budget. However, Governor Tim Walz and legislative leaders announced that day that they had reached a broad global agreement on the budget. The global agreement includes how funds will be allocated between different state agencies, how some of the $2.8 billion in federal American Rescue Plan funds will be used, and decisions on a few key policy details. Still to be determined are details within each agency budget on how the funds will be used, as well as most policy decisions, including some that have stymied House and Senate negotiators thus far. Committee chairs are tasked with leading these decisions.
Included in the agreement is the decision to fully conform to federal tax law regarding the Paycheck Protection Program loan forgiveness and unemployment benefits, meaning that businesses and individuals will not have to pay tax on these benefits. Additionally, leaders have committed to spending $70 million on broadband expansion.
Regarding the federal American Rescue Plan funding, the Governor will have a bucket of $500 million to use as he deems appropriate, while $550 million will be allocated for the legislature to spend in each of the next two biennia. The legislature will decide how to use the remaining $1.2 billion next year.
Described as a budget-only agreement, several key policy issues, including police reform and so-called “clean car” standards, are yet to be decided. During the regular session, the conference committees that have jurisdiction over these issues struggled to make any progress on negotiating either policy or budget issues due to lack of agreement on these policy issues.
Leaders have given committees a Friday, May 28, deadline to adopt a spreadsheet detailing how the money allocated to the agency is to be spent. They provided an additional week for legislators to adopt policy provisions in committee, with decisions due by Friday, June 4. Staff would then have a full business week to prepare the formal bills for an anticipated special session on Monday, June 14.
Several members of the Republican caucus in the House expressed dissatisfaction with the agreement. Minority Leader Kurt Daudt (R-Crown) told the StarTribune, “Who from the legislative branch would ever agree to let the governor spend $500 million on whatever he wanted should turn in their election certificates and find a new job.” It is rumored that the House Republicans will not agree to suspend the rules to pass bills for a one-day special session, which will force legislators to extend the session into several days.
With three days before the end of the regular legislative session and no global budget agreement on the horizon, only seventeen bills have passed both the House and Senate and been sent to Governor Tim Walz for his signature. In one such case, Winthrop lobbyists worked on behalf of a client to pass a bill that clarified the law regulating continuing education course provider activities. The Minnesota Department of Commerce issued an administrative bulletin in 2020 that strictly interpreted the law in such a way that upended traditional business models for continuing education course providers. The lobbying team successfully negotiated a compromise with the Department, which formed the foundation for the language of Senate File 1020, authored by Sen. Gary Dahms (R-Redwood Falls) and Rep. Ginny Klevorn (DFL-Plymouth). The bill passed the legislature overwhelmingly and was signed into law by the Governor.
This past Monday, Minnesota received long-awaited guidance on how federal funds passed under the American Rescue Plan can be used. Along with the guidance, the state was informed that it will receive approximately $200 million more than expected, bringing the total funds coming to the state to $2.8 billion (this does not include additional funds being sent directly to tribal, local and county governments). How to use these funds has been, and will continue to be, a significant part of the budget negotiations between legislative leaders and the Governor.
According to Minnesota’s state constitution, the regular legislative session must end by the first Monday following the third Saturday of May. This year, that date falls on May 17. In odd-numbered years, the focus of the legislature is to pass a biennial budget. At this point, there is still no “global agreement” between leadership, and the legislature will not be able to pass a budget prior to the end of regular session. There will be a special session.
If they are not already in a special session for the budget, Governor Walz is expected to call a special session on June 14, which is the date that the current peacetime emergency will expire.
If the legislature doesn’t pass a new budget by June 30, a state shutdown will begin on July 1. With Minnesotans’ love for state parks and the Fourth of July weekend, avoiding a shutdown is a huge priority for state leaders. In previous shutdowns, Minnesota courts deemed certain state services “essential,” and continued funding for them, but since then, the state Supreme Court ruled that the courts do not have this power, and if the legislature does not appropriate funds, there will be no funds, even for “essential” services.
Following updated guidance released by the CDC yesterday, Minnesota’s mask mandate is lifted effective today. The state’s guidance allows local jurisdictions and businesses to continue requiring masks if they choose; Minneapolis and St. Paul are keeping their mandates in place, at least for now. Additionally, both students and staff are required to continue masking until the end of the current school year.
The Minnesota Legislature will reconvene next year on January 31, 2022.
The Minnesota legislative session is required to end within ten days. At the beginning of the week, legislative leaders announced that they had given themselves a goal of having a broad global agreement on key issues and budget targets by Friday (today). Following such an agreement, conference committees would need to finalize details within their individual bills.
On Tuesday, Senate leadership publicly shared a document that explained its opening offer to the House for a global agreement on key end-of-session issues. In the days since, there have been no other offers or counteroffers that have been made public. Quiet negotiations such as those happening now is typically a sign that the legislative leaders are conducting serious negotiations.
Yesterday, Governor Tim Walz announced a three-step plan to nearly eliminate all COVID-19 restrictions and protections by July 1. The announcement helps to ease tensions between Republicans and the Governor, and should help to advance budget negotiations. The highlights of the announcement include:
Remaining in place will be the eviction moratorium, the ban on price gouging, and eligibility exemptions for people who receive state services.
This week, the Senate passed a bill that has been a priority of the Republican majority for a number of years. On a vote of 34-32, S.F. 173, authored by Sen. Scott Newman (R-Hutchinson) which would require that voters show identification, was approved. The House will not take up the bill, though it is expected to vote on the adult-use cannabis bill next week (which the Senate will not advance).
On Thursday, the House of Representatives passed H.F. 2539, the Sign and Release Warrant Bill, authored by Rep. Jamie Long (DFL-Minneapolis). Rep. Long said the bill is a response to the death of Daunte Wright, who was in the process of being arrested due to an outstanding warrant when he was shot. H.F. 2539 would allow officers who find a person who has missed a court date, for certain gross misdemeanors or misdemeanors, to simply provide notice of a new court date and have the person sign an acknowledgment of the notification. Republicans argued that the new sign and release process included too many gross misdemeanors. The bill passed along party lines, 73-59, with most DFLers voting for the bill and Republicans voting against.
Earlier this week, it was reported that Senator Michelle Benson (R-Ham Lake) is considering running for governor in 2022. Sen. Benson, who is chair of the Health and Human Services Finance and Policy committee, joins Senate Majority Leader Paul Gazelka (R-East Gull Lake) and Senator Carla Nelson (R-Rochester) in those speculated to be eying the seat. None are expected to make a final decision until after the legislature adjourns.