As we have previously reported, the most recent Minnesota legislative session resulted in a number of new laws that affect employers with Minnesota-based employees. We have issued client alerts about Minnesota’s new law banning noncompete agreements, as well as new and/or expanded laws regarding earned sick and safe time, paid family and medical leave, parental leave, pregnancy accommodation, lactating employees, and recreational adult-use marijuana. But the Minnesota Legislature did not stop there. Additional developments - including an amendment to Minnesota’s wage disclosure protection statute, the passage of the CROWN act, and a pay history inquiry ban - also require employers to review their policies and practices.
Wage Disclosure Protection – July 1, 2023
Minnesota’s wage disclosure protection statute, Minn. Stat. § 181.172, requires employers to allow employees to discuss their wages with others if they wish to do so. The statute previously prohibited employers from retaliating against employees for exercising their rights. The Minnesota Legislature amended the anti-retaliation provision to more explicitly prohibit employers from discharging, disciplining, penalizing, interfering with, threatening, restraining, coercing or discriminating against an employee for asserting the employee’s rights under the statute. This change went into effect on July 1, 2023. The wage disclosure protection statute requires employers that provide an employee handbook to their employees to include a notice of employee rights and remedies under the statute in the handbook, so employers should update their employee handbooks to reflect the amended language.
CROWN Act – August 1, 2023
On August 1, 2023, the CROWN Act, which prohibits discrimination based on race-based natural hair texture and styles, went into effect in Minnesota. The law amends the Minnesota Human Rights Act (the “MHRA”) to define “race” as “inclusive of traits associated with race, including but not limited to hair texture and hair styles such as braids, locs, and twists.” The new definition applies everywhere the MHRA applies, including workplaces, businesses and schools. With respect to employment coverage, any employer with one or more employees is covered by the MHRA. Accordingly, employers should review their policies and procedures to ensure they comply with this new definition.
Pay History Inquiry Ban – January 1, 2024
Minnesota is joining a growing number of states around the country that prohibit salary history inquiries of job applicants to try to minimize the impact of historical societal pay gaps, such as the gender pay gap, on salary decisions. Effective January 1, 2024, the MHRA has been amended to ban employers from inquiring about pay history. The new law will prohibit employers, employment agencies and labor organizations from inquiring into, considering or requiring disclosure from any source of the pay history of a job applicant for the purpose of determining wages, salary, earnings, benefits or other compensation for that applicant.
The ban does not apply if the job applicant’s pay history is a matter of public record, unless the employer, employment agency or labor organization seeks access to those records with the intent of obtaining the pay history of the applicant for determining wages, salary, earnings, benefits or other compensation.
The law does not prevent job applicants from voluntarily disclosing their pay history, so long as the applicants are not asked, encouraged or prompted to disclose their pay history to a prospective employer, employment agency or labor organization. Furthermore, if job applicants voluntarily disclose their pay history, employers may consider or act upon that pay history information to support a wage or salary higher than initially offered by the employer, employment agency or labor organization.
Employers should review their application materials and recruiting and hiring practices to ensure compliance. Employers should also train staff involved in their recruiting and hiring process so that they are prepared for the pay history ban to take effect on January 1, 2024. For employment covered by collective bargaining agreements, the ban is not effective until the implementation date of the applicable collective bargaining agreement that is after January 1, 2024.