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HF2567 (Legislative Session 94 (2025-2026))

Stay-or-pay provisions made prohibited, unenforceable, and against public policy.

Related bill: SF2533

AI Generated Summary

Purpose of the Bill

This bill aims to address issues related to employment contracts, specifically targeting "stay-or-pay" provisions. These are clauses that require employees to remain with a company for a certain period or face penalties. The bill seeks to declare such provisions prohibited, unenforceable, and against public policy in Minnesota.

Main Provisions

  • Prohibition of Stay-or-Pay Clauses: The bill makes it illegal for employers to include stay-or-pay provisions in employment contracts. These provisions usually penalize employees if they leave the company before a specified period.
  • Legal Unenforceability: Any existing stay-or-pay agreements would become unenforceable, which means employers could not legally compel employees to comply with such terms through the judiciary.
  • Public Policy Declaration: The bill explicitly states that these provisions are against the public policy of Minnesota, further reinforcing their prohibition.

Significant Changes to Existing Law

  • Amendment to Compliance Orders: The bill modifies Minnesota Statutes section 177.27, subdivision 4, which governs how compliance orders against employers are issued. This provision ensures systematic enforcement against the usage of stay-or-pay terms by employers.
  • Enlarged Scope of Employer Responsibility: The law would ensure that even contractors who assume subcontractors' liabilities are considered employers under certain enforcement and compliance measures if they attempt to enforce such provisions.

Relevant Terms

stay-or-pay provisions, employment contracts, prohibited, unenforceable, public policy, compliance orders, employer liabilities

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 19, 2025HouseFloorActionIntroduction and first reading, referred toWorkforce, Labor, and Economic Development Finance and Policy
March 23, 2025HouseFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "The bill amends the compliance order provisions under section 177.27 subdivision 4.",
      "modified": [
        "Clarifies the process for issuing compliance orders and defines the term 'repeated violation' in relation to compliance orders."
      ]
    },
    "citation": "177.27",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Mentions an employer's obligations under section 181.165.",
      "modified": []
    },
    "citation": "181.165",
    "subdivision": ""
  }
]

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