The Minnesota legislative session ending in 2024 resulted in a number of new laws that impact employers. While not as expansive as the legislative changes in 2023, there are several key provisions that employers should know (all of this while Minnesota employers are still working to understand and implement the 2023 changes, including paid sick leave, a ban on non-competes, and legalized cannabis, among others).
The 2024 Minnesota Legislature brought forth several amendments to existing laws and new laws related to employment, including:
- New definitions and remedies for employee misclassification;
- A new poster requirement regarding employer-sponsored meetings or communications;
- A requirement for salary ranges to be included in job postings for covered employers;
- Authorization for oral fluid testing in the Minnesota Drug and Alcohol Testing in The Workplace Act (“DATWA”);
- An additional requirement that an employer must maintain insurance coverage for an employee when they are taking leave under Nursing Mothers, Lactating Employees, and Pregnancy Accommodations and Pregnancy and Parental Leave;
- A ban on “shadow non-competes;” and
- A change that means employees’ right to review personnel records applies to employees of all employers.
Here is a summary of the two major bills that have been signed into law impacting employment law.
Omnibus Labor and Industry Policy Bill (SF 3852) – Gov. Walz signed into law on May 17, 2024
New Laws
- Minn. Stat. § 181.173 – Salary Ranges Required in Job Postings
- Effective January 1, 2025.
- Employers with 30 or more employees at one or more sites in Minnesota will be required to post the starting salary range, and a general description of all of the benefits and other compensation, including but not limited to any health or retirement benefits, to be offered to a hired job applicant.
- A “posting” means any solicitation intended to recruit job applicants for a specific available position, including recruitment done directly by an employer or indirectly through a third party, and includes any postings made electronically or via printed hard copy.
- A salary range may not be open ended.
- Takeaway: this will have a real impact on job postings in Minnesota, and it is in line with a number of states that have already enacted “pay transparency” laws like this. (Click here for a previous article from FMJ regarding the impact of pay transparency.) These laws are intended to create more pay equity and reduce wage gaps, but they also expose more information about wage and pay rates in an organization, so employees will have more access to this information than they might otherwise have. HR and employers should begin planning for this requirement now.
- Minn. Stat. §181.9881 – Restrictive Employment Covenants; Void in Service Contracts (“shadow non-compete ban”)
- Effective July 1, 2024.
- Applies to contracts and agreements entered into on or after July 1, 2024.
- The law prevents a company that provides services to a customer from restricting the customer from directly or indirectly soliciting or hiring one of its employees.
- Workers that provide professional business consulting for computer software development and related services who are seeking employment through a service provider with the knowledge and intention of being considered for a permanent position of employment with the customer as their employer at a later date are excluded from the ban.
- Takeaway: this is similar to the emerging non-compete bans in that this is intended to encourage flexibility and reduce restrictions on employees looking to move to other employers. It also reinforces the need to re-evaluate other policies and areas where organizations can still protect themselves, including trade secrets and non-solicitation agreements.
Amendments to Existing Laws
- Minn. Stat. § 177.27, subd. 7 – Powers and Duties of Commissioner (misclassification of employees)
- Effective the day following final enactment, May 18, 2024.
- The Minnesota Department of Labor and Industry (“DOLI”) can penalize a business up to $10,000 if it classifies, represents, treats, reports, discloses, documents, or enters into an agreement with an employee that treats the employee as something other than an employee.
- Takeaway: this provision gives DOLI the power to enforce changes related to misclassification of employees as independent contractors. These changes were introduced as part of the new Minn. Stat. § 181.722 (see below).
- Minn. Stat. § 181.531 – Employer-Sponsored Meetings or Communications
- Effective October 1, 2024.
- DOLI will create a poster with notice of employees’ rights that must be posted where employee notices are customarily located within the workplace.
- Takeaway: the law prohibiting certain mandatory employer-sponsored meetings and communications regarding religion or politics was part of the 2023 legislation, but this new notice will help clarify rights and obligations for employees and employers.
- Minn. Stat. § 181.950 to 181.957 – Minnesota Drug and Alcohol Testing in the Workplace Act (“DATWA”)
- Effective the day following final enactment, May 18, 2024.
- Allows for testing of oral fluid (saliva) for drug, alcohol, and cannabis testing of an employee or job applicant.
- Takeaway: this is in further response to the changes involving legalized cannabis and the issues that come along with drug and alcohol testing.
- Minn. Stat. § 181.939, subd. 2 – Nursing Mothers, Lactating Employees, and Pregnancy Accommodations
- Effective the day following final enactment, May 18, 2024.
- During any leave for which an employee is entitled to benefits or leave under the Minnesota Nursing Mothers, Lactating Employees, and Pregnancy Accommodations Act, an employer must maintain coverage under any group insurance policy, group subscriber contract, or health care plan for the affected employee and any dependents as if the employee was not on leave – provided, however, that the employee must continue to pay any employee share of the cost of the benefits.
- Takeaway: this extends insurance coverage into leave periods, as long as employees continue to pay their usual share of the costs.
- Minn. Stat. § 181.941 – Pregnancy and Parenting Leave
- Effective the day following final enactment, May 18, 2024.
- During any leave for which an employee is entitled to benefits or leave under the Pregnancy And Parenting Leave, an employer must maintain coverage under any group insurance policy, group subscriber contract, or health care plan for the affected employee and any dependents as if the employee was not on leave, provided, however, that the employee must continue to pay any employee share of the cost of the benefits.
- In addition, any leave provided as Pregnancy and Parenting Leave must not be reduced by any period of paid or unpaid leave taken for prenatal care medical appointments.
- Takeaway: also extending insurance coverage while preventing prenatal leave or care from counting against leave after a pregnancy.
Tax and State Government Operations; Various Provisions Modified, and Money Appropriated Bill (HF 5247) – Gov. Walz signed into law on May 23, 2024
Amendments to Existing Laws
- Minn. Stat. § 181.960 – Definitions to Review of Personnel Record by Employee
- No effective date listed.
- Employers of any size are to provide copies of personnel records upon request. The requirement was previously limited to employers with 20 or more employees.
- Takeaway: smaller employers will need to establish practices and policies to comply with this provision and to be able to provide access to personnel records as needed.
- Minn. Stat. § 181.722 – Misclassification of Employment Relationship Prohibited
- Effective July 1, 2024.
- The Minnesota Department of Labor and Industry (“DOLI”) can penalize a business up to $10,000 if that business classifies, represents, treats, reports, discloses, documents, or enters into an agreement with an employee that treats the employee as something other than an employee.
- Takeaway: this provision clarifies DOLI’s enforcement power and potential penalties for misclassification. This penalty would be on top of any other issues that may arise when an employee is misclassified as an independent contractor. This analysis is becoming more complicated, and it is getting harder to meet the definition of independent contractor. Click here, for example, to learn more about the U.S. Department of Labor’s new independent contractor rules.
FMJ’s HR & Employment Law Practice Group is available to help review your company’s employee practices, draft new policies and practices, and create and implement strategies for the future. There have been some other new changes in Minnesota as well – click here to read about amendments to the Minnesota Human Rights Act, and click here to read about changes/updates to earned sick and safe time and the new paid medical leave program Minnesota. If you are interested in connecting with the team to discuss questions or concerns about any of these new changes, or any other HR and employment law matters, please contact V. John Ella and the HR & Employment Law Practice Group.
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