Hiring, Benefits, Employee Policies - League of Minnesota Cities

Updated April 1, 2025

Q1: How can I limit employee turnover in my city?

A1: Turnover is the loss of talent/employees (through resignations, retirements, layoffs and terminations) in the city workforce over time. While employee turnover is not always a bad thing, the number of staff leaving and the reasons behind the departure are important to consider. There may be a multitude of ways to reduce unwanted employee turnover, including hiring the right people, ensuring the city is offering a competitive total compensation package, and prioritizing employee work-life balance. Some employers in this labor market are seeking ways to retain their superstar employees through various approaches like offering flexible work options/remote work policies, implementing employee recognition actions like “Thank-You Thursdays,” and offering career development and training opportunities like Spanish language outreach. Still others are considering incentives to encourage employees to provide the city with more notice for upcoming retirements to help with transitioning new workers on board (see Lakeville’s Advance Resignation Notice Program).

Resources:
HR Reference Manual – Chapter 2 Hiring
HR Reference Manual – Chapter 4 Compensation
HR Reference Manual – Chapter 5 Benefits
City Career Advantage
Classification and Compensation Plan Framework for Smaller Cities, LMC Model (docx)

Q2: The labor market is really tight, so we have been considering hiring a remote worker from another state. Which state law applies when an employee works in another state than Minnesota?

A2: Although there can be differences based on the state, most employment-based laws (such as wage-and-hour, fair-employment, workers compensation, unemployment and the like) are applied according to the state in which an individual works. Thus, the answer depends not only on the type of employment issue (e.g., payroll taxes, leave eligibility, etc.), but also on the state, or even the city, in question. Be sure to review State Employment Law Considerations for Remote and Related Workers. Cities should be aware that generally state laws often do not define a relevant “threshold” for determining whether a city is required to comply with that law as it pertains to a particular employee. Of course, that does not necessarily mean the law does not apply, or that it would not be determined by the relevant authority to apply, and no hard rule exists for making such determinations. In those instances, the conservative advice may be to err on the side of caution and comply with whichever state’s law is more beneficial to the employee. One exception to this lack of definition is Minnesota’s earned sick and safe time (ESST) law established Jan. 1, 2024. The ESST law requires employers to award, at a minimum, one hour of ESST for every 30 hours worked for any employee anticipated to work at least 80 hours in a year for an employer in Minnesota. According to Minnesota Department of Labor and Industry (DLI) guidance, if an employer is based in Minnesota but the employer has employees working in another state, out-of-state employees are not eligible for ESST if they do not perform any work in Minnesota. For additional details, please reference the State of Minnesota ESST FAQs.

Q3: What do I do when an employee is not performing as expected?

A3: Ideally, all employees’ performance will be measured through a performance review on a regular basis. If an employee is not performing as expected, cities will want to follow city policies and procedures they laid out for corrective action. Most employers find “letting an employee’s performance issue slide” for one employee and not another to be problematic. It hurts workplace performance and could mean that the city is at risk for potential liability. Some key considerations outlined in the Discipline and Termination Chapter of the HR Reference Manual include determining whether there is an employee capability issue (lack of knowledge, lack of understanding), motivation (not feeling appreciated), or if some other important consideration is in play.

Even if the employment is at-will, cities cannot take an adverse employment action against an employee for a discriminatory reason or other reason that is protected by law. Instead, cities need ensure any adverse employment action is based on a legitimate, nondiscriminatory, and nonretaliatory reason. We also strongly recommend a cities partner with their city attorney to work through the process to ensure no important steps are missed. Employers will also consider, among other factors, the severity of an employee’s action(s) and related impacts to the workplace, frequency of the act or behavior, the duration of the employee’s employment, relevant policies and prior notice to the employee regarding the need for corrective actions, as well as other extenuating considerations. It’s really important to document the steps the city has taken with the employee, including written communication to the employee explaining expectations. This type of documentation helps strengthen city communication by establishing that an incident or event occurred, outlining what actions the city took, and helping demonstrate the city’s diligence in establishing and enforcing workplace performance standards.

Q4: Why do I need personnel policies or an employee handbook in my city?

A4: Personnel policies are written rules and guidelines necessary to keep the city functioning smoothly from a human resources perspective. Personnel policies help implement a consistent approach to management. They are the formal rules and guidelines the city puts in place to hire, train, assess, and reward employees. They serve as a guide for managers to provide a framework for uniform and consistent administration. When managers and supervisors use well-written policies to guide personnel management decisions, they are much more likely to treat everyone in a fair and just manner. Finally, personnel policies are proof the city took some time to consider potential issues and to establish written rules and guidelines as employment conditions for city employees. Keep in mind, you don’t have to re-invent the wheel in creating a set of personnel policies; the League has a model policy you can use for your next set of updates: Personnel Policy Template, LMC Model Policy (docx).

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Q5: It’s been a while since we have looked at our employment applications. What should we be checking for?

A5: While an employment application can be a helpful tool to learn about an applicant’s education and work experience, it’s vital a city asks the right questions lawfully at the appropriate time. Make sure your city employment application isn’t asking for an applicant’s protected class information such as maiden name, social security number, date of birth, arrest or conviction information or current or previous pay history.

State law prohibits public employers in Minnesota from asking for information related to convictions on the employment application form, unless the background check is required by state or federal law. Beginning Jan. 1, 2024, employers are prohibited from asking, considering, or requiring the pay history of an applicant for employment for the purpose of determining compensation for that applicant. Applicants may voluntarily and without asking or promoting disclose pay history for the purposes of negotiating compensation. The Minnesota Department of Human Rights offers some helpful information at mn.gov/mdhr/employers/pay-history. Accordingly, the League’s model employment application does not include any requests for an applicant’s salary information. In addition to prohibiting employers from asking about an applicant’s previous salary history, Minnesota enacted a pay transparency law in 2025 for certain employers related to job posting requirements, see Q7. Remember, you don’t have to reinvent the wheel when you update your city employment application; the League has a model you can use: Employment Application, LMC Model Form (docx).

Q6: What can I legally ask in an interview?

A6: Cities will want to avoid asking applicants any personal questions that are not related to the job (e.g., family/children, daycare arrangements, marital status, disabilities, ethnic background, sexual orientation, and religion). In 2023, Minnesota enacted the CROWN Act (Creating a Respectful and Open World for Natural Hair) that protects individuals from discrimination based on hair style. It amends the Minnesota Human Rights Act to define “race” as including “traits associated with race, including but not limited to hair texture and hair styles such as braids, locs and twists.” Asking questions about and/or discriminating against these protected class areas can result in charges of discrimination, an investigation by the U.S. Equal Employment Opportunity Commission (EEOC), or the Minnesota Department of Human Rights (MDHR), and potentially a lawsuit if the issue cannot be resolved. In addition to avoiding any personal questions that are not job related, cities will want to avoid asking applicants about their current or previous salary history. You can review the League’s Pre-Employment Inquiry Guide (pdf) for examples of questions to avoid in your recruitment process.

Q7: Do I have to post all city vacancies?

A7: Not necessarily; as in most situations, there is no state or federal law specifically requiring a city to advertise a job opening. However, there are several reasons cities may decide on their own to advertise or post all vacancies. Also, there are some limited situations in which there may be a legal obligation for the city to post a vacancy. For example, some union collective bargaining agreements might require a city to post union vacancies internally for a certain number of days before the city can post the vacancy externally. Cities sometimes establish a policy of publicly advertising or posting all of their job openings in conjunction with their equal employment opportunity or affirmative action policy. For example, to recruit a diverse workforce, the city specifies all positions will be advertised publicly in both general audience newspapers as well as publications that serve specific cultural, social, or ethnic audiences. In addition to aiding with inclusion efforts, this type of policy will often help defend the city in a lawsuit or discrimination complaint over a hiring decision. A city may also choose to publicly advertise all job openings simply to make sure it takes the opportunity to review the qualifications of all available candidates. Beginning Jan. 1, 2025, employers with 30 or more employees are required to include in any job posting, the salary range and general description of benefits and other compensation including, but not limited to, any health or retirement benefits. This requirement applies to any electronic or printed job posting. Also, if a city uses a third party for recruitment, like an executive search firm, the starting salary range and general description of benefits is required for those job postings as well. For additional information on job postings, please refer to Section IV, D in the HR Reference Manual – Chapter 5 Hiring. To post your city job ad on the LMC website, visit the Careers page.

Q8: How can we improve our seasonal hiring process?

A8: We’ve got a MemberLearn online learning course for that! This free course for LMC members is specifically designed for small cities and will give you an overview of the types of seasonal employment characteristics, requirements for employing minors, and recruitment tips for seasonal hiring. Access the MemberLearn course “Tips for Seasonal Hiring.” Additionally, be sure to check out our seasonal recruitment case studies featured on the City Career Advantage webpage for creative approaches to consider.

Q9. We plan to hire a city worker soon. How do I determine if the person should be classified as an employee or an independent contractor?

A9: The League provides an overview memo labeled “Employee or Independent Contractor” and this can be a great tool for a discussion with your City Attorney about how best to classify your new city worker. The DOL issued its final rule regarding the Fair Labor Standards Act analysis employers are to use when determining whether a worker is an employee or an independent contractor. The final rule, which took effective March 11, 2024, considers the “totality of the circumstances” approach by adopting a six-factor framework for analyzing worker-employer relationships. The focus of the overall analysis is to decide if the worker is economically dependent on the employer for work or is instead in business for themself. Under the new rule, no single factor or groups of factors hold any greater weight over any other factor in the analysis, which is a departure from the previous 2021 (now rescinded) rule. It’s important cities work with their legal counsel to avoid misclassification of workers. Misclassified independent contractors can expose employers to significant potential liability including, far reaching financial ramifications for the city such as Fair Labor Standards Act obligations (minimum wage and overtime, just to name a few), workers compensation liability, unemployment insurance law, pension and insurance benefit violations, as well as others.

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