With the legislative session commencing on February 17^th, much of the discussion revolves around what actually might get done this year.  The House remains evenly split 67 GOP and 67 DFL so any bill that passes will need to have bipartisan support.  The Senate has a 34 DFL and 33 GOP split so if any member of the DFL is opposed to an issue, members again will need bipartisan support.  The legislature also has a small surplus, however during an election year, it is hard to rationalize both sides compromising and passing sweeping legislation.  The session adjourns May 18^th.

Minnesota’s economic budgetary outlook remains tight with a surplus remaining in the FY2026-27 biennium but facing a structural imbalance in FY2028-29.  Last year the legislature needed a special session to prevent a government shutdown and pass a two-year budget.  Being that there is a surplus, typically the legislature would consider supplemental budget bills, but with the structural imbalance in FY28-29 (a result of spending outpacing revenues) will likely keep any spending bills to very minimal and only one-time uses.

As for finding a compromise, all 201 (134 House and 67 Senate) members are up for reelection in the fall.  Along with that, the constitutional officers are all up for election as well.  Gov. Walz had originally stated he was running for a third term, but at the beginning of the year reversed his decision and stepped down paving the way for Amy Klobuchar to run.  With Gov. Walz not running again, this will be his last year to make any final impacts as governor of Minnesota and likely will be more combative now that he has nothing to lose.

Get Involved

Members of the legislature rely heavily on their constituents when considering legislation and how they may vote on certain measures. They often prioritize meetings with constituents who make the trip to St. Paul and encourage constituents to engage in the process.  Last year we held a day at the Capitol which had decent turnout from CAM members.  Due to safety and security concerns, access may be limited and days at the Capitol are uncertain.  We strongly encourage you to reach out to your elected officials and let them know your concerns.  This can be done via emailing, calling, or meeting either in person or virtually.  The team at Faegre is prepared to assist with any of these options, help compose talking points and attend meetings.  Our legislative priorities this year will be to prevent government and insurance overreaching into our practices, further advancement of fortified homes, simplifying statutes regarding look-back timelines for repairs, and workforce issues (including immigration issues).  We are still developing our legislative priorities so please do not hesitate to reach out to the legislative subcommittee with any thoughts or recommendations.

Again, your support and participation in CAM is critical to our having a strong voice at the Capitol.  We will continue to push for CAM-friendly legislation.  If you have any questions about getting involved, please don’t hesitate to reach out to Todd.

Sincerely,

Faegre Drinker Lobbying Team

Employers in Minnesota must provide earnings statements with certain required information to all employees at the end of each pay period.

Earnings statements are important payroll records for employers and employees that document information about wages paid, hours worked, deductions made and benefits accrued by an employee.

Earnings statements must include at least the following information:

1. the name of the employee;
2. the total hours worked by the employee in the pay period, unless the worker is considered exempt under the Minnesota Fair Labor Standards Act;
3. the rate or rates of pay, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission or other method;
4. any allowances claimed for meals or lodging under Minnesota Rules 5200;
5. the gross pay earned by the employee in the pay period;
6. the net pay after all deductions are made;
7. a list of all deductions (taxes, insurance, union dues, other) made from the employee’s pay;
8. the date the pay period ended;
9. the employer’s legal and operating name;
10. the employer’s telephone number; and
11. the physical address of the employer’s main office or principal place of business and a mailing address, if different.

In addition, under Minnesota’s earned sick and safe time law, which goes into effect Jan. 1, 2024, employers will be required to include the following additional information on earnings statements:

• the total number of sick and safe time hours available for use by the employee; and
• the total number of sick and safe time hours used by the employee in the pay period.

Contact DOLI for any questions

What changed?

• State law  prohibits contractors from offering to pay homeowners’ insurance deductibles or offering anything of value as encouragement to enter into a contract to repair damage covered by an insurance claim.
• A new law (effective since Aug. 1, 2018) requires that contractors include a written notification about the law in their “initial estimate.” The “initial estimate” also includes price agreeable contracts.
• The new law also requires insurance companies to provide a similar written notification to homeowners in their initial correspondence about a claim.

Why the change?

• Many contractors who have complied with the law that prohibits paying deductibles have lost business to contractors who illegally offer to pay deductibles or offer rebates or upgrades that are barred.
• Homeowners are unclear about this law and some still expect their contractor to help with insurance deductible costs. This new law provides contractors with solid information to show that this practice is simply illegal.

What do I need to do?

• If your company does not perform insurance repair to homes, you do not need to do anything as this law does not affect your business.
• If you do perform insurance repair work, you will need to update your contracts to include a written notification of the law that prohibits covering deductibles.
• The notification can be included in the contract document or provided to the customer as a separate document.

What should the notification say?

The law does not provide specific language to be included, but we suggest the following:

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim. Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry, including fines of up to $10,000 per violation.

 Where can I ask questions?

Contact us at 651-284-5069 or dli.contractor@state.mn.us.

The Contractors Association of Minnesota chalked upon another win at the legislature this past session! Given the divided government and the truly acrimonious session between the Legislative and the Executive Branch this year CAM was able to pass a small but significant piece of legislation.  The legislation requires insurance companies as well as contractors to clearly explain in writing that an insurance deductible can not be paid as part of a contract with a homeowner.  You may recall that some years ago, the Insurance Federation of Minnesota passed a law prohibiting this practice.  With the spate of yearly storm occurrences, there has been an increase in this practice by insurance adjusters as well as contractors that encourage or offer to have the deductible paid by the contractor.  This is illegal and can result in an enforcement action against the contractor by the Department of Labor and Industry.

All written estimates by the insurance industry and contractors must note this.  It is suggested that your written estimates have the following statement on every estimate.  It is also suggested that you point this out to all of your customers when negotiating a contract.

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim.  Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry including fines of up to $10,000 per violation.

Please contact Lisa Frenette at frenettela@gmail.com if you have further questions or any concerns.

Contractors Association of Minnesota Policy and Regulatory Update

HF 2696 (Rep. Tim Mahoney – D) and SF 2660 (Senator Jeff Howe – R)

This bill requires mortgage banks and lenders (banks) to sign a check over to homeowners within a timely period after work required to repair a storm occurrence has been completed.

Banks, on occasion, are a signatory on an insurance proceed for a storm occurrence. The issue is they will hold on to the proceed check, sometimes up to six months, before signing it over to the homeowner. This puts the homeowner and the contractor repairing the storm occurrence in a bad position. In most cases, the homeowner doesn’t have funds available to pay for damages and costs to repair their home and the contractor cannot float the money while waiting to be paid for a job that has been performed.

As expected, the banks have several problems with the bill. CAM will be sitting down with to start discussing how this issue can best be resolved in the near future.

You can follow a link to the bill by clicking the HF 2696 above.

HF 1596 (Rep. Nick Zerwas and SF 1349 (Senator Mark Johnson – R)

Tim Johnson, partner at Smith, Jadin and Johnson, and CAM met with Senator Mark Johnson last week to discuss legislation that would effectively take away the ability for a homeowner to receive interest on an appraisal award when an insurance company makes a bad faith offer on property that has been damaged due to a storm occurrence.

While this is not directly related to important issues that CAM works on, it is important to CAM’s clients. It simply slows done the process for homeowners who may have an insurance adjuster lowball a claim to get their home repaired when it has been damaged.

The number of claims going to appraisal has trickled due to a 2017 Minnesota Supreme Court decision allowing interest a claim if the insurance companies were found to have made a low offer to homeowners on a storm occurrence. CAM wants the best results for the homeowners to get relief by means of having their home repaired.

CAM will continue to monitor this since it is important for contractor to assist homeowners in repairing their damaged homes.

You can follow a link to the bill by clicking HF 1596 above.

Insurance Companies Denying Claims where the Building Code is not Enforced.

CAM met with the Association of Minnesota Building Officials (AMBO) to discuss resolving the problem of insurance companies denying claims where the Minnesota Statewide Building Code is not enforced.

CAM and AMBO will be meeting with DOLI and the Department of Commerce on April 11th to learn what can be done to stop the insurance companies from denying claims in areas of Minnesota where there is no official statewide building code enforcement.

Important Reminder!

It’s illegal for contractors to pay homeowners’ insurance deductibles

Spring has sprung and due to the severe winter weather it looks as though exterior contractors will have a busy spring and summer. This is great news for the industry but contractors should be aware of a new state law requiring contractors to disclose on the contract that they are NOT ALLOWED to offer and/or pay for a homeowner’s insurance deductible.

CAM advocated for this legation last year citing contractors who have complied with the law that prohibits paying deductibles have lost business to contractors who illegally offer to pay deductibles or offer rebates or upgrades. Homeowners are unclear about this law and some still expect their contractor to help with insurance deductible costs. This new law provides contractors with solid information to show that this practice is illegal.

In short, state law prohibits contractors from offering to pay homeowners’ insurance deductibles or offering anything of value as encouragement to enter into a contract to repair damage covered by an insurance claim. A newer law (effective since Aug. 1, 2018) requires that contractors include a written notification about the law in their “initial estimate.” The “initial estimate” also includes price agreeable contracts. Insurance companies are required to provide a similar written notice to homeowners in their initial correspondence about a claim.

If your company performs insurance repair work, you will need to update your contracts to include a written notification about the law that prohibits paying deductibles. To stay on the safe side, CAM encourages contractors to update their all of their Icontracts to include this notification.

The law does not require specific language on a contract , but one example is:

State law (Minn. Stat. § 325E.66) prohibits contractors from offering to pay a customer’s insurance deductible or offering anything of value as an inducement to enter into a contract for home repairs that are to be paid for as a part of an insurance claim. Contractors who make such an offer are subject to public enforcement action by the Minnesota Department of Labor and Industry, including fines of up to $10,000 per violation. Contact DOLI at 651-284-5069 or dli.contractor@state.mn.us. if you have further questions.