What happened?

On May 17, 2024, Governor Walz signed SF 3852 / HF 3947 into law, which includes a wide range of new employment-related requirements on different dates and topics.

What are the details?

Key Bites for Employers

• Employers now must produce records in the time and manner specified by the commissioner when requested.
• The commissioner now has the power to order reinstatement and any other appropriate relief to the aggrieved parties.
• Employers subjected to sections 177.21 to 177.44 must include a new item to their recordkeeping obligation, which is to keep “… (7) earnings statements for each employee for each pay period as required by section 16.9 181.032, paragraphs (a) and (b)…”
• For employers that provide nursing home services, the board must adopt rules establishing initial standards for wages for nursing home workers no later than November 1, 2024 (previously August 2024).
• Regarding Pregnancy accommodations, employers now must do the following “During any leave for which an employee is entitled to benefits or leave under this subdivision, the employer must maintain coverage under any group insurance policy, group subscriber contract, or health care plan for the 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.”
• Regarding Continued Insurance, employers now must do the following: “During any leave for which an employee is entitled to benefits or leave under this section, the employer must maintain coverage under any group insurance policy, group subscriber contract, or health care plan for the 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.”
• Regarding the Relationship to Other Leaves, the length of leave provided under Section 181.941 may not be reduced by any period of paid or unpaid leave taken for prenatal care medical appointments.
• Restrictive covenants for service providers, including employees and independent contractors as defined in the law, will be void and unenforceable from existing contracts and agreements from July 1, 2024. If a provision in an existing contract violates this restriction, the service provider must provide notice to their employees. There is an exception for workers providing professional business consulting for computer software development and related services.
• When the commissioner issues an order and the employer fails to provide a written response of objection in 15 calendar days, the order becomes final (subdivision 2).
• If an employer is found to have violated any provision of sections 181A.01 to 181A.12, or any rules promulgated under section 181A.09, and an order was issued under subdivision 2, the commissioner shall order remedies (from cease and desist to reimbursement of attorney’s fees) plus interest rate.
• Fines are capped but are now for violations, the lowest being $250 and the highest $1.000. They will be imposed based on the size of the employer, gravity, and history of violations.
• An employer who employs minors in violation of the law may be liable for liquidated damages as defined in the law.
• There is a prohibition of retaliation for exercising rights or remedies.
• Apprentice data and other provisions are modified.
• Unfair labor practices for employees and employers’ verbiage language changes.
• For minimum wage:
  • Definitions of large and small employers are added. This is effective from January 1, 2025.
  • The 2-tier minimum wage for large and small employers is replaced by a unified minimum wage and verbiage is erased from law. This is effective from January 1, 2025.
  • The inflation mechanism is amended and is effective from August 1, 2024.
• A gratuity section for employees has been created, must be distributed no later than the next scheduled pay period, and will be effective on August 1, 2024.
• Pay transparency is introduced and effective on January 1, 2025:
  • Employers must disclose in each job posting for each job opening the employer’s starting salary range or fixed pay rate, and a general description of all the benefits and other compensation, including but not limited to any health or retirement benefits, to be offered to a hired job applicant. An open-range salary is not permitted.
  • This must be done by including job offerings through third parties.
• Employers must post a notice of workers’ rights where workers customarily are within the workplace by October 1, 2024. This notice will be developed by the commissioner in English and 5 other languages that are spoken in Minnesota.
• Oral Fluid Test is created and regulated to be considered an exception to the limitation on testing done by the employer. The chain of custody does not apply to this procedure.
• For healthcare employers, surgical smoke evacuation system policies are created and must comply with the requirements from January 1, 2025.

Business Considerations

• Employers should be prepared to produce records in the time and manner specified by the commissioner when requested. Employers should provide a written response of objection in 15 calendar days if the commissioner issues an order.
• Employers should understand that the commissioner now has the power to order reinstatement and any other appropriate relief to the aggrieved parties.
• Employers should update their policies and practices of recordkeeping regarding earnings statements for employees.
• Employers should update their pregnancy accommodation policy, continued insurance policy, as well as all other policies to comply with the new requirements.
• Employers should be aware that restrictive covenants for service providers will be void and unenforceable from existing contracts and agreements from July 1, 2024. If a provision in an existing contract violates this restriction, the service provider must provide notice to their employees.
• Employers should conduct an audit and review their child workers to make sure they comply. Although fines are now capped, they can be imposed for each violation, the lowest being $250 and the highest $1,000.
• Employers should not retaliate against employees for exercising their rights or remedies.
• Employers should be aware of the changes to minimum wage laws, including the definitions of large and small employers, the replacement of the 2-tier minimum wage with a unified minimum wage, and the amendment of the inflation mechanism, as well as nursing homes.
• Employers should distribute gratuities to employees no later than the next scheduled pay period.
• Employers should disclose in each job posting the employer’s starting salary range or fixed pay rate, and a general description of all the benefits and other compensation to be offered to a hired job applicant, even through third parties.
• Employers should post a notice of workers’ rights where workers customarily are within the workplace by October 1, 2024.
• Employers should understand that the Oral Fluid Test is created and regulated to be considered an exception to the limitation on testing done by the employer if they plan to incorporate it as a tool into their testing policies.
• Employers should comply with the requirements for surgical smoke evacuation system policies from January 1, 2025, if they are a healthcare employer.

Source References

• SF 3852 / HF 3947
• SF 3852 Text

Resources

• Minnesota Employment Legislative Update 2024, Part IV: The Aftermath of Minnesota’s Legislative Circus (Ogletree Deakins)
• MN DOL Pregnancy & Parental Leave

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