Minnesota Legislative Update 2024: Employment Law Bills Cover ESST, Human Rights Act, Pay Disclosure, and Restrictive Covenants

Quick Hits

• The Minnesota Legislature is considering competing bills that would amend the statewide earned sick and safe time law.
• The legislature has also introduced bills that would hike punitive damages for violations of the Minnesota Human Rights Act and require employers with thirty or more employees to include salary ranges in job postings.
• Additional legislation would bar staffing agencies from restricting their employees from working directly for their customers, and allow striking workers to be eligible for unemployment benefits.

Statewide Earned Sick and Safe Time Amendments

There is something for both employers and employees in the competing House of Representatives and Senate bills that would amend the earned sick and safe time (ESST) leave requirements.

House File (HF) 4462

HF 4462 would tip the scale in favor of employers by proposing several changes to ESST, including:

• preventing the Department of Labor and Industry from imposing any monetary penalty for an initial violation of ESST requirements until after January 1, 2025;
• allowing employers with twenty-five or fewer full-time employees to pay employees at half of the hourly rate an employee earns from employment;
• not requiring employers in their first twelve consecutive months of operation to provide ESST;
• excluding minors (under age eighteen), certain part-time employees, certain seasonal workers, and others from the definition of “employee”;
• allowing prorating of frontloaded ESST hours;
• allowing an employer to impose a ninety-day waiting period before an employee can use accrued ESST hours; and
• requiring employees to provide at least two hours’ notice before the start of their scheduled shifts for unforeseeable ESST absences.

Status within the legislature: HF 4462 had its first reading and was referred to the Labor and Industry Finance Policy Committee. HF 4462 does not have a Senate companion bill.

HF 3882/Senate File (SF) 3787

Companion bills HF 3882 and SF 3787 set out to clarify and reduce confusion left over from the rollout and implementation of ESST. But they also include more compliance measures, rulemaking, and remedies. The changes proposed include additional changes to Minnesota’s ESST law, including, but not limited to:

• specifying certain remedies, including holding an employer liable to all employees not provided or not allowed to use ESST if the employer was found to not have provided ESST under the law;
• removing the provision of the ESST law that would exempt employees of air carriers currently found in Minn. Stat. § 181.9446;
• authorizing rulemaking by the commissioner of labor and industry to carry out the ESST law;
• adding a remedy to ESST enforcement under Minn. Stat. § 177.50, making an employer liable to each employee who did not receive or is not allowed to use ESST as required under the law “for an amount equal to all [ESST] that should have been provided or could have been used at the employee’s regular rate of pay, plus an additional equal amount as liquidated damages.” An employer that does not possess records sufficient to determine the ESST an employee should have been provided would be liable for up to 48 hours for each year ESST was not provided and an additional equal amount as liquidated damages;
• removing the ESST earning statement requirements and allowing employers to “choose a reasonable system for providing this information”;
• adding “bereavement leave” as a qualifying ESST absence; and
• allowing an employer to require employees to use ESST in at least fifteen-minute increments.

Status within the legislature: HF 3882 sits in the House Labor and Industry Finance Policy Committee and had its second reading. SF 3787 had its first reading and was referred to the Senate Judiciary and Public Safety Committee.

Changes to the Minnesota Human Rights Act (MHRA)

HF 4021/SF 4292

Civil money penalties mandatory; increased punitive damages for employers. HF 4021 and its companion bill, SF 4292, would modify the MHRA by updating definitions, clarifying procedures, increasing procedural timelines, amending damage awards in civil actions, and clarifying remedies. Most notably, the companion bills would require the court to order a civil monetary penalty fine to be paid to the state by the respondent and compensatory damages, including mental anguish or suffering, in an amount up to three times the actual damages sustained by an aggrieved party if the respondent is found to be in violation of the discrimination sections within the MHRA. Other key changes proposed include:

• modifying the definition of “disability” to include “an impairment that is episodic or in remission and would materially limit a major life activity when active,” and
• modifying the time a person or the commissioner can bring a civil cause of action from forty-five days to ninety days when the issue has been dismissed or there is a no probable cause determination.

Status within the legislature: HF 4021 was referred to the Judiciary Finance and Civil Law Committee and had its second reading on March 7, 2024. SF 4292 was referred to the Judiciary and Public Safety Committee after its first reading.

Salary Ranges Required in Job Postings

HF 3587/SF 3725

Minnesota may join the growing list of states, including California, Colorado, Connecticut, and New York, that require employers to include salary ranges in job postings. Companion bills HF 3587 and SF 3725 would require employers to disclose the “starting salary range, and a general description of all the benefits and other compensation to be offered to a hired job applicant” in job postings. As introduced, the bills apply to “a person or entity that employs 30 or more employees at a minimum of one site.”

Status within the legislature: HF 3587 had its first reading and was referred to the Labor and Industry and Finance Policy Committee. SF 3725 had its first reading and was referred to the Labor Committee.

Restrictive Employment Covenants in Service Contracts

HF 3456/SF 3721

Staffing agencies or similar entities in Minnesota would be barred from restricting their employees from directly working for their customers. HF 3456 and SF 3721, companion bills, would prevent a “service provider” from restricting, restraining, or preventing a “customer” from directly or indirectly soliciting or hiring an employee of a service provider.

This appears to mean that a customer would be free to “poach” a service provider’s employee, or that the employee may work directly with the service provider’s customer without the service provider’s approval. If enacted, the companion bills would require service providers to remove restrictions for employees by adding an addendum or signed memorandum acknowledging that the restrictions are not enforceable. This action would have to be completed by the service provider within one year of the enactment of the legislation. In addition, when an existing contract has a restriction prohibited by the legislation, the service provider would be required to provide notice to their employees of the law.

Status within the legislature: HF 3456 currently sits in the Judiciary Finance and Civil Law Committee and had its second reading. SF 3721 had its first reading and was referred to the Judiciary and Public Safety Committee.

Unemployment for Striking Workers

HF 3446/SF 3588

Striking workers would be eligible for unemployment benefits under certain conditions. HF 3446 and SF 3588 would amend Minn. Stat. § 268.085, subd. 13b, so striking workers would not be automatically ineligible for unemployment benefits during a labor dispute.

Status within the legislature: HF 3446 had its first reading and was referred to the Workforce Development Finance and Policy Committee. SF 3588 had its first reading and was referred to the Jobs and Economic Development Committee.

Ogletree Deakins’ Minneapolis office will continue to monitor developments and will publish updates on the Minnesota blog as additional information becomes available.

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