12-03-2025 Council Packet - Laserfiche WebLink

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Staff Report To:Mayor Fischer and Members of the City Council From:Heidi Heller, City Clerk/HR Manager Date: December 3, 2025 Re:Proposed Long-Term Disability Plan Change Action To Be Considered: Motion to approve, table, or deny the following: Change policy to city-paid long-term disability premium Background: In 2014 the city changed from separate vacation time and sick time to Personal Time Off (PTO). With this change, all regular part-time and full-time employees who accrue benefits are required to be enrolled in the city’s short-term disability plan (city-paid) and long-term disability plan (employee-paid). All employees (regular and temporary) are now required to be provided paid time off through the Minnesota Earned Sick and Safe Time (ESST) program. Current programs for employees: Short-term disability (STD) is only approved for the employee’s illnesses or injuries. STD payments start on day 15 after the injury/illness and continue until day 89. Employees receive 66- 2/3% of their salary up to a maximum of $2,000 per week. The maximum has been increased to $2,000 per week in 2026 since our previous cap of $1,300 per week was too low. Employees need to use PTO, sick time, or their deferred sick time to cover the first 14 days of their illness/injury before STD begins. Long-term disability (LTD) is only approved for the employee’s illnesses or injuries. LTD payments start on day 90 after the injury/illness, and employees receive 60% of their pay up to a maximum of $6,000 per month. In 2024, Minnesota’s Earned Sick and Safe Time (ESST) law went into effect which requires employers to provide paid leave for things such as illness, care taking or safe time needs. The city’s PTO accrual rates exceed the requirements for ESST, but employees who do not accrue PTO (work less than 20 hours per week or seasonals), accrue ESST hours. The ESST program does not have a direct cost to the city other than potentially having to pay for time off for employees that do not earn PTO. New in 2026: Minnesota’s Paid Leave program begins in 2026. Since many employers do not provide paid time off for their employees, the state has created a program to offer this for most Minnesota employees. This program allows for paid time off for reasons such as illness, injury, family leave, and care taking of family members. Employees can take up to 12 weeks off per year, per reason, with a maximum of 20 weeks if there is another reason. MN Paid Leave begins paying benefits on day 1.