| 1 | 1 | | 1.1 A bill for an act |
|---|
| 2 | 2 | | 1.2 relating to employment; providing that stay-or-pay provisions are prohibited, |
|---|
| 3 | 3 | | 1.3 unenforceable, and against public policy; amending Minnesota Statutes 2024, |
|---|
| 4 | 4 | | 1.4 section 177.27, subdivision 4; proposing coding for new law in Minnesota Statutes, |
|---|
| 5 | 5 | | 1.5 chapter 181. |
|---|
| 6 | 6 | | 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: |
|---|
| 7 | 7 | | 1.7 Section 1. Minnesota Statutes 2024, section 177.27, subdivision 4, is amended to read: |
|---|
| 8 | 8 | | 1.8 Subd. 4.Compliance orders.The commissioner may issue an order requiring an |
|---|
| 9 | 9 | | 1.9employer to comply with sections 177.21 to 177.435, 177.50, 179.86, 181.02, 181.03, |
|---|
| 10 | 10 | | 1.10181.031, 181.032, 181.10, 181.101, 181.11, 181.13, 181.14, 181.145, 181.15, 181.165, |
|---|
| 11 | 11 | | 1.11181.172, paragraph (a) or (d), 181.214 to 181.217, 181.275, subdivision 2a, 181.635, 181.64, |
|---|
| 12 | 12 | | 1.12181.722, 181.723, 181.79, 181.85 to 181.89, 181.939 to 181.943, 181.9445 to 181.9448, |
|---|
| 13 | 13 | | 1.13181.987, 181.989, 181.991, 268B.09, subdivisions 1 to 6, and 268B.14, subdivision 3, with |
|---|
| 14 | 14 | | 1.14any rule promulgated under section 177.28, 181.213, or 181.215. The commissioner shall |
|---|
| 15 | 15 | | 1.15issue an order requiring an employer to comply with sections 177.41 to 177.435, 181.165, |
|---|
| 16 | 16 | | 1.16or 181.987 if the violation is repeated. For purposes of this subdivision only, a violation is |
|---|
| 17 | 17 | | 1.17repeated if at any time during the two years that preceded the date of violation, the |
|---|
| 18 | 18 | | 1.18commissioner issued an order to the employer for violation of sections 177.41 to 177.435, |
|---|
| 19 | 19 | | 1.19181.165, or 181.987 and the order is final or the commissioner and the employer have |
|---|
| 20 | 20 | | 1.20entered into a settlement agreement that required the employer to pay back wages that were |
|---|
| 21 | 21 | | 1.21required by sections 177.41 to 177.435. The department shall serve the order upon the |
|---|
| 22 | 22 | | 1.22employer or the employer's authorized representative in person or by certified mail at the |
|---|
| 23 | 23 | | 1.23employer's place of business. An employer who wishes to contest the order must file written |
|---|
| 24 | 24 | | 1.24notice of objection to the order with the commissioner within 15 calendar days after being |
|---|
| 25 | 25 | | 1Section 1. |
|---|
| 26 | 26 | | REVISOR SS/RC 25-0388102/28/25 |
|---|
| 27 | 27 | | State of Minnesota |
|---|
| 28 | 28 | | This Document can be made available |
|---|
| 29 | 29 | | in alternative formats upon request |
|---|
| 30 | 30 | | HOUSE OF REPRESENTATIVES |
|---|
| 31 | 31 | | H. F. No. 2567 |
|---|
| 32 | 32 | | NINETY-FOURTH SESSION |
|---|
| 33 | 33 | | Authored by Greenman03/20/2025 |
|---|
| 34 | 34 | | The bill was read for the first time and referred to the Committee on Workforce, Labor, and Economic Development Finance and Policy 2.1served with the order. A contested case proceeding must then be held in accordance with |
|---|
| 35 | 35 | | 2.2sections 14.57 to 14.69 or 181.165. If, within 15 calendar days after being served with the |
|---|
| 36 | 36 | | 2.3order, the employer fails to file a written notice of objection with the commissioner, the |
|---|
| 37 | 37 | | 2.4order becomes a final order of the commissioner. For the purposes of this subdivision, an |
|---|
| 38 | 38 | | 2.5employer includes a contractor that has assumed a subcontractor's liability within the meaning |
|---|
| 39 | 39 | | 2.6of section 181.165. |
|---|
| 40 | 40 | | 2.7 EFFECTIVE DATE.This section is effective July 1, 2025. |
|---|
| 41 | 41 | | 2.8 Sec. 2. [181.989] STAY-OR-PAY PROVISIONS VOID IN EMPLOYMENT |
|---|
| 42 | 42 | | 2.9CONTRACTS. |
|---|
| 43 | 43 | | 2.10 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have |
|---|
| 44 | 44 | | 2.11the meanings given. |
|---|
| 45 | 45 | | 2.12 (b) "Commissioner" means the commissioner of labor and industry. |
|---|
| 46 | 46 | | 2.13 (c) "Department" means the Department of Labor and Industry. |
|---|
| 47 | 47 | | 2.14 (d) "Employee" has the meaning given in section 181.988, subdivision 1, paragraph (c). |
|---|
| 48 | 48 | | 2.15 (e) "Employer" has the meaning given in section 181.988, subdivision 1, paragraph (b). |
|---|
| 49 | 49 | | 2.16 (f) "Independent contractor" has the meaning given in section 181.988, subdivision 1, |
|---|
| 50 | 50 | | 2.17paragraph (d). |
|---|
| 51 | 51 | | 2.18 (g) "Stay-or-pay provision" means a written agreement or contract provision that requires |
|---|
| 52 | 52 | | 2.19an employee to pay the employer or the employer's agent or assignee a sum of money if the |
|---|
| 53 | 53 | | 2.20employee leaves the employment before passage of a stated period of time, including but |
|---|
| 54 | 54 | | 2.21not limited to a written agreement or contract provision stating payment of money constitutes |
|---|
| 55 | 55 | | 2.22reimbursement for training provided to the employee by the employer or by a third party, |
|---|
| 56 | 56 | | 2.23recruitment and training costs for replacement employees, lost revenue, or liquidated |
|---|
| 57 | 57 | | 2.24damages. |
|---|
| 58 | 58 | | 2.25 Subd. 2.Prohibiting use of stay-or-pay provisions.(a) A stay-or-pay provision is |
|---|
| 59 | 59 | | 2.26unconscionable, against public policy, and prohibited. |
|---|
| 60 | 60 | | 2.27 (b) No employer may present an employee or prospective employee with a stay-or-pay |
|---|
| 61 | 61 | | 2.28provision, or require an employee or prospective employee to execute a stay-or-pay provision, |
|---|
| 62 | 62 | | 2.29as a condition of employment. The execution of a stay-or-pay provision as a condition of |
|---|
| 63 | 63 | | 2.30employment is against public policy and is void. If a stay-or-pay provision is part of a larger |
|---|
| 64 | 64 | | 2.31agreement, the invalidity of the provision does not affect other provisions of the larger |
|---|
| 65 | 65 | | 2.32agreement. |
|---|
| 66 | 66 | | 2Sec. 2. |
|---|
| 67 | 67 | | REVISOR SS/RC 25-0388102/28/25 3.1 (c) No employer may enforce or threaten to enforce a stay-or-pay provision against an |
|---|
| 68 | 68 | | 3.2employee. |
|---|
| 69 | 69 | | 3.3 (d) A waiver of this section is invalid. |
|---|
| 70 | 70 | | 3.4 Subd. 3.Enforcement.(a) An employer found to have violated this section shall be |
|---|
| 71 | 71 | | 3.5fined by the commissioner not less than $1,000 and not more than $5,000 for each violation. |
|---|
| 72 | 72 | | 3.6 (b) Each time an employer presents an employee or prospective employee with a |
|---|
| 73 | 73 | | 3.7stay-or-pay provision, or requires the execution of, enforces, or threatens to enforce a |
|---|
| 74 | 74 | | 3.8stay-or-pay provision, constitutes a separate violation of this section. |
|---|
| 75 | 75 | | 3.9 Subd. 4.Civil action.One or more employees or prospective employees seeking redress |
|---|
| 76 | 76 | | 3.10for a violation of this section may, on their own behalf or on behalf of similarly situated |
|---|
| 77 | 77 | | 3.11employees or prospective employees, bring a civil action in district court. In the event of a |
|---|
| 78 | 78 | | 3.12successful action, a plaintiff shall be awarded injunctive relief as appropriate, actual damages, |
|---|
| 79 | 79 | | 3.13an additional $5,000 for each violation, and reasonable costs and attorney fees. |
|---|
| 80 | 80 | | 3.14 Subd. 5.Scope.(a) This section supersedes common law only to the extent that it applies |
|---|
| 81 | 81 | | 3.15to a stay-or-pay provision but otherwise does not affect principles of law and equity consistent |
|---|
| 82 | 82 | | 3.16with this section. |
|---|
| 83 | 83 | | 3.17 (b) The rights and remedies provided in this section are in addition to and do not |
|---|
| 84 | 84 | | 3.18supersede any other rights and remedies provided by statute or common law. |
|---|
| 85 | 85 | | 3.19 EFFECTIVE DATE.This section is effective July 1, 2025, and applies to contracts |
|---|
| 86 | 86 | | 3.20and agreements entered into on or after that date. |
|---|
| 87 | 87 | | 3Sec. 2. |
|---|
| 88 | 88 | | REVISOR SS/RC 25-0388102/28/25 |
|---|