The current 2023 Minnesota legislative session has been a whirlwind of activity and may prove to be the most consequential year in recent history for many employers doing business in the state. Below is a summary of proposed new laws and one new law that has already passed – the Crown Act - that employers should pay attention to, as, if passed, they will directly impact compliance obligations and current operating procedures.
Paid Family and Medical Leave
The Minnesota House of Representatives recently approved HF2, a bill that would provide eligible employees with up to 18 weeks of paid family and medical leave starting in 2025. Similar to paid leave laws in other states, eligible employees and employers would pay into a state program similar to Minnesota’s unemployment insurance fund. Employees would then be able to make a claim to the state to receive partial wages when taking leave for their own serious health condition, to bond with a child, to care for a family member’s serious health condition, to care for a family member who is an ill or injured covered service member, or for safety leave.
Eligible employees would be eligible to take up to 12 weeks of paid leave for their own serious health condition, their own pre-natal care, for bonding leave with their new child, to care for a family member with a serious health condition or who is an ill or injured servicemember, or for safety leave. If a need arises for leave for an employee’s own serious health condition and to care for a family member, the total leave taken in a year may not exceed 18 weeks except that an employee may take up to additional 6 weeks of leave if they experience pregnancy complications. It is important to note that the Minnesota Senate, which is considering this proposed bill, is expected to cap leave at 20 weeks if the law passes, regardless of complications related to pregnancy.
Although the law would not apply to self-employed individuals or independent contractors, those eligible for leave benefits would be very broad. Eligible employees would include (1) employees working at least 50% of the time within the state of Minnesota, (2) employees working less than 50% of the time in Minnesota but who reside in Minnesota, or (3) employees whose employment is controlled and directed out of Minnesota.
Although some revisions may be made once the bill reaches the floor of the Minnesota Senate, Governor Walz has already expressed his support for the bill, and it is expected to become law.
Paid Sick and Safe Leave
Another significant proposed law passed by the Minnesota House in February of this year is bill HF19, which would provide all employees, regardless of whether they are full-time, part-time, or temporary, with paid sick and safe leave in certain situations. Under the proposed law, an eligible employee would earn one (1) hour of paid sick and safe leave for every thirty (30) hours worked, although employers may cap accrued leave at no more than forty-eight (48) hours each year. If an employer uses the accrual method, employees must be allowed to carry over any earned but unused paid sick and safe leave into the next year, however, an employer may cap accrued sick and safe leave so that it never exceeds eighty (80) hours.
Earned sick and safe leave would be available to be used for: (1) an employee’s own health condition, (2) in order to care for a family member, (3) absences due to domestic abuse, sexual assault or stalking of the employee or employee’s family member, (4) closure of the employee’s place of business or an employee’s need to care for a family member whose school or place of care has been closed due to weather or other public emergency; or (5) the employee’s inability to work or telework because of health concerns related to the potential transmission of a communicable illness related to a public emergency.
Although the bill has been stalled in the Minnesota Senate for the last two months, given the makeup of the legislature, it is expected to pass. If signed into law, the policy would take effect in 2024.
Another proposed law expected to make its way to Governor Walz’s desk is the legalization of adult-use marijuana for recreational purposes. HF100 is notable because it would directly impact employers who currently test applicants or employees for marijuana use. As drafted, the bill would prohibit employers from requiring job applicants to test for marijuana as a condition of employment unless otherwise required by state or federal law. As for current employees, employers may still prohibit the use of marijuana while working, but testing would only be allowed where an employer has a reasonable suspicion that, due to substance use, the employee “does not possess that clearness of intellect and control of self that the employee otherwise would have” or in the event of an accident or injury.
The law would also specifically amend Minnesota’s lawful consumable products law to include a direct reference to marijuana. This means that the law, which prohibits adverse employment action for the consumption of a lawful product outside of working hours, would expressly mention marijuana as a lawful product. Because marijuana remains illegal under federal law, some uncertainty may remain as to whether the state law would, in fact, prohibit employers from acting based on the use of marijuana outside of work.
Prohibition on Non-Compete Agreements
Following the proposed Federal Trade Commission (FTC) rule at the federal level to prohibit the use of non-compete agreements, Minnesota’s House of Representatives also recently introduced its own bill that, if enacted, would prohibit employers from requiring employees to sign non-compete agreements and would retroactively void any non-compete agreement currently in effect.
Importantly, the proposed law would not render an entire agreement entirely unenforceable if the agreement contained other lawful covenants such as a non-solicitation or non-disclosure covenant. Only the unenforceable noncompete covenant would fail. The proposed law would also prohibit an employer from attempting to work around the law by including a choice of law provision outside of Minnesota.
The proposed law is currently moving through various different legislative committees.
Minnesota’s New CROWN Act
On February 1, 2023, Minnesota joined a growing list of states when Governor Walz signed a law prohibiting discrimination based on hair texture and hairstyles, commonly referred to as the CROWN Act. While the Minnesota Human Rights Act already prohibits discrimination in the workplace based on race and national origin, the new law specifically lists various hairstyles that are now protected, including braids, locs, and twists.
As you can see, the current legislative session is likely to significantly impact workplace policies and procedures. We will continue to track the above laws and provide updates. Employers with questions about how the proposed rule might affect their employment practices are advised to seek legal counsel.