New MN Sick and Safe Time law as of 1/1/24

There is no "after 30 hours then add 1 hour of sick time" way to calculate sick time in QuickBooks.

The only way to do this in QB is to accrue the time per hour worked on the paycheck, which is giving the employee slightly more than the law requires, but only within each 30 hour window, which evens out at the end of the 30 hour window.

In practice, you won't really end up allotting more sick time than the law requires unless you pay the employee for that last fraction of an hour of sick time and then they quit without working more hours to finish the 30 hour window.

Okay, this will be a close enough option to add sick and safe time for our salaried employees, but I should have mentioned that we also have hourly employees that have two different pay rates.  If they have overtime, a line must be added to their paychecks for WAOT.  Doing this inflates their paycheck hours.  It doesn't affect their timesheet hours.  As the sick pay accrual uses the paycheck hours, anyone with WAOT on their paycheck would be calculated incorrectly. 

Also, it shouldn't calculate sick pay on any non-work hours that appear on the paycheck such as holiday pay or PTO or bereavement pay.  I saw another post from someone trying to follow a similar new law for sick pay in the state of WA.  They mentioned their sick pay hours had been inflated due to accruals that had incorrectly included non-working hours.  Any suggestions?

We have a very similar situation.  On your paystubs there is a line for regular hours and a line for overtime hours?  Is that what you mean by WAOT? From my understanding if an employee works 90 hours in a pay period, they would accrue 3 hours of ESSL.  

Regular hours - 80

Overtime - 10

Accrued ESSL - 3

Are you saying your pay stubs are set up like this-

Regular hours - 90

OT Rate - 10 - (the difference between regular and overtime?)

WAOT is weighted average overtime which we pay out to employees that have worked more than 40 hours, but they have two different regular pay rates.  As a result, I must add an additional line to the paycheck which increases the number of hours.  The additional line only pays the additional 1/2 time owed at the WAOT rate.  For example.....  48 hours at earning rate of $50 and 10 hours at earning rate of $25.  Total hours are 58.  I must pay 18 hours of OT, but these 18 are paid at the WAOT rate which is not a rate that can be set up on the employee records as the rate is not consistent.  I'll do a manual calculation outside of QB for the WAOT rate.  In this example the WAOT rate is 22.84.  The lines on the paycheck read: 48 reg hrs @ $50,  10 reg hrs @ $25, 18 WAOT hrs @ $22.84.  The total QB paycheck hours now reads 76, but the actual number of work hours to accrue sick pay on are 58.  Hope this makes sense. 

I know your post is from a few months ago, but for what its worth, I have a suggestion to fix your inflated WAOT problem. I fix it by adding an additional earnings entry for WAOT (mine is PWOT for prevailing wage overtime), zeroing out the rate and subtracting the number hours OT.  Then, the total hours for that paycheck should match their actual hours worked or paid out on that check.  Subtraction only works if the total hours do not reach zero or go less than zero.    

Did you ever find the solution to only accruing on "worked" hours?  Our system is still trying to calculate accrued hours on Holiday and Bereavement time.  Thanks.

Hello, @danaolson.

It seems that you have already asked a similar question that one of my colleagues has already answered. I recommend checking out their response through this link for further details.

Please let us know if you need further assistance with QuickBooks-related concerns. We'll do our best to assist you. Take care.

No, the solution offered by your colleague is unacceptable.  QBs wants users to create a separate paycheck for PTO, Holiday, and any other items that are non-worked hours.  This isn't a solution, it's a sloppy, time consuming, unacceptable work around a poorly designed and coded payroll software system.  Intuit should improve their product, not create more work for customers.  

I completely agree with this - it is not a solution - it is unacceptable.   Other software companies are able to do this, so Intuit should also.   The State made the law, and Minnesota is not the only State to have this law.   Also, I have talked to multiple agents on the phone and been given the run around about this solution - and actually was told it would be fixed in an update 1/1/24, which clearly was not the case.

QuickBooks doesn't have a solution.  We are handwriting the required ESST details on the paystubs and tracking on a separate spreadsheet.  In the process of selecting a new payroll vendor that can deal with this issue.  So frustrating!

@MKayK  if you're open to connecting about how you are tracking externally, I would be interested.  Also when you find a new vendor if you care to share I am also in the search process.

Yes, after reading several posts and QB how-to's, I believe I figured out the best way to avoid sick/vacation time accruing on non-working wages such as Holiday Pay, which is allowed under the new MN Earned Sick and Safe Time law:

- either create a separate payroll run for non-working wages, such as Holiday or Bereavement pay and select "do not accrue sick/vac" on each check manually

OR

- Set up a new Additional/Other payroll item (QB wouldn't let me edit my existing Holiday Pay payroll item, it had to be re-created).  Since my original Holiday Pay was setup under the hourly wage Type, it automatically accrued sick/vaca time.  However, QB does not accrue sick/vaca on Bonus and Addition types.  And those can be setup as a taxable wages in the set-up process. I also found that it does turn up on my employee payroll summary reports as gross wages, which is what we want. 

Here are the steps to set-up Holiday Pay as an additional payroll item that does Not accrue sick/vacation time (I have QuickBooks Desktop):

1.Select Lists, then Payroll Item List

2.Select Payroll Item dropdown, then New

3.Select Custom Setup, then Next

4.Select payroll type Addition, then Next

5.Name your payroll item, such as Holiday Pay - Hourly Addition, then Next

6.Choose the expense account you want for the item, then Next

7.Select Compensation as your tax tracking type, then Next

8.Leave the pre-selected taxes alone, then Next

9.Select Calculate this item based on Hours, then next (do not select the additional box labeled "Include sick and vacation hours"), then Next

10.Leave the default rate and limit as 0, Then FINISH

To pay the employee Holiday Pay in a payroll run on each employee's check you are creating, choose your new Payroll Item in the dropdown list under Other Payroll Items. Fill in the employee's pay rate and quantity of hours you are awarding them. Finish payroll as usual.

See attached image. Note: the employee I used has a pre-loaded amount of vacation time in the example.  But, you'll see that the Sick Time only accrued time on the hourly wage above and not the Holiday Pay, which is the goal.  Good luck!

Does this allow you to import the holiday hours from QuickBooks Time?  Thanks!

Thanks for this. Though if I'm understanding the law correctly, as per BigRedConsulting's above, employees don't start accruing until after they've worked 30 hours. And you don't pay them unless they use the hours (previous posts seem to indicate that you have to pay them the hours regardless, but I'm probably misunderstanding). 

We also have an hourly intern, who only works a few hours per week (and may not even count for ESS, I've seen conflicting info, but that's another can of worms), but I can't figure out a way to get QB to only start accruing after the 30 hours and only after the next 30 hours, etc. I thought about having it accrue at .03 hours/1 hour worked, but that doesn't seem right either. 

Thank you!  I am going to work on this over the weekend!

Thank you for this!  I am going to try this out!

We asked the MN DOL specifically this:

The FAQ states that employees begin accruing ESST on the day they start employment, but the FAQ also seems to imply that the employees aren’t eligible to use ESST until they have worked 80 hours for the employer.  The above snippet states that “Employees may use earned sick and safe time as it is accrued.”  The question is: Can the employee use ESST hours before they have worked 80 hours for their employer?

In relation to the 80-hour eligibility question: if ESST must be accrued starting January 1, 2024, and on the first day of employment, and if the employee is not eligible until 80 hours worked, is the employer still required to show the accrued, available, and used ESST hours on the paystub if the employee is not eligible for ESST?

ANSWER from MN DOL:

If it is likely the employee will reach 80 hours during the year (full time staff, scheduled hours, etc.), the statute states the employee is to earn ESST as they work, so 1 hour per 30 hours worked. This insures the employee can use ESST immediately after it is accrued and in the smallest increment allowable by payroll. This is a minimum requirement of the law.

Hope this helps!

You are correct, MN employees do not get to redeem their accrued hours until after they have worked 30 hours.  But per MN law, they start accruing hours right away which needs to be printed on each check or they need to be provided a separate statement each payday.  See MN DOL Fast Facts : 

When do employees begin to accrue ESST?

Employees begin accruing ESST on their first day of employment. 

Added Dec. 4, 2023:  Do employees start accruing ESST before or after they have worked their first 80 hours for an employer? 

ESST accrual begins immediately when an employee starts working for an employer.

To clarify, programming the hours worked to calculate ESST hours accrued on the paycheck in QuickBooks is not a payout.  You will have to use a sick or vacation payroll item to pay the employee who makes a request to use their Earned Sick and Safe Time. And it is up to the employer to allow the payout request starting after the employee accrued 30 hours. Additionally, MN DOL also states that all part-time and full-time employees must accrue ESST.  Anyone who does not receive a 1099 who is considered an independent contractor would not apply to this law.  If the intern is unpaid, I suggest contacting the MN DOL directly with that question or consulting a professional for advice.   And yes, you don't have to pay it out unless it is one of the reasons on the list. The fast facts mention that you do not have to pay ESST for days they were not even scheduled.  And if I read this correctly, it would be up to the employer to allow additional payouts in their company policy. Hope this helps.

MN Department of Labor: MN DOL Fast Facts 

Also to address the question on the accrual rate, the number you need to program sick/vacation time in QB desktop to comply with MN ESST (1 hour accrued per 30 hours worked) is 00:02:00 or 2 minutes accrued for every hour worked (2 min x 30 hours = 60 minutes accrued).  Unless you choose to pre-load the whole amount of time for the beginning of the year.

Hi, Tracy_K -

Don't forget - there are two ways to setup QB (edit -> company preferences -> time format). You have the option to track hours worked in minutes or decimals. If you process your payrolls entering "minutes" worked, then accruing 00:02.00 for every hour worked - works but if QB is setup for the "Decimals" option, you'll need to set it up so the employee earns .0333 or .0334 for every hour worked.  

Isn't this the same law requirement as the New Mexico?  They have instructions published for the New Mexico Law.  The instructions for implementing the New Mexico law states that you add the the sick time calculation as .0333 for every hour worked?  When I called Intuit on this in December I received the same runaround - ,they could not answer any question on this, was told it was not their responsibility to determine the calculation for me.  When I referred to the same New Mexico law, was told that there would be a software change put in on the 1st (which makes no sense) and to call after the 1st and they would be able to answer, but not before.  Was also told a link would be sent 'after the call' that would explain the requirements further.  I asked if they could go over the requirements for this law over the phone with me and was told 'no' they could not discuss, I was to read the link once the call was ended.   Typical for the company to give the standard runaround.  This has been the status quo for a while now with this company...

I set our sick time up to accrue .0333 hrs of sick time for every hour worked.  Maximum hrs to acrue is 48 per year.  with a maximum to carry over of 80hrs. 

Can you give the example of how you are entering that in the sick time area?

Is it "1" hour with a max of 30?

I was thinking the max was the 48 hours / year.

Thank you!

I set our system up with this work around in order to pay payroll - until we can find something better. The PTO accrual worked spot on for only calculating on Hourly / Salary / Overtime, since I have Holiday and Bereavement set up as "Addition" Compensation lines.

A few things to Note that I found this week while running our first payroll:

• Pay Stubs do not add the Qty for the Holiday or Bereavement time set up as "Additions" do not add into the total Hours Calculation.  i.e. If there are 72 Hourly hours, and 8 Holiday hours (as addition), the total under hours says 72.
• On Payroll Summary Reports, the Qty added in for the "Addition" Compensation lines, does not pull through as hours or the rate - that would have to be manually added to get an entire picture of total hours. 
• On Workers Compensation Report, the Qty entered for the "Addition" Compensation lines does not pull through to that report.  The only items that pull are those set up as Hourly Wage or Yearly Salary.  This also means that the accrual in liabilities will not be correct.

There might be more items I find as I keep working through the year - if anyone has any ideas on how to correct the above, I would love to hear them!