On May 24, 2023, Minnesota Governor Tim Walz signed into law the Omnibus Jobs Bill SF 3035 which includes sweeping changes to Minnesota’s state employment laws.
The bill is designed to protect workers’ rights, ensure equal pay for equal work, and expand benefits such as paid leave. It will require Minnesota employers to pay careful attention to their employee PTO, vacation, and sick or personal leave policies to ensure compliance by the beginning of next year. Additionally, the bill includes a near-total ban on non-compete provisions, expanded protections for nursing mothers and “lactating employees,” and increases in pregnancy accommodation rights.
Ban on Non-Compete Clauses
The Omnibus Jobs Bill includes a near-complete ban on non-compete clauses in employment agreements. This is a major victory for employees in Minnesota, as non-compete agreements can prevent individuals from working in their chosen field for years after leaving their current employer. They are often included in employment contracts, even for low-level, low-wage employees.
The new prohibition applies to both employees and independent contractors, regardless of their income. Only a few exceptions exist, such as when a business is sold or in cases of theft of trade secrets. Furthermore, the bill applies to non-compete agreements entered into, modified, or extended on or after January 1, 2020.
Earned Sick and Safe Time obligation
The bill also creates a new statewide obligation that requires employers to provide “earned sick and safe time” (ESST) to all Minnesota employees, including temporary and seasonal employees. This is a significant victory for workers’ rights advocates, as many employees in Minnesota previously had no access to paid sick leave.
The coverage includes any employee who performs work in Minnesota for any employer, regardless of their classification. They must be allowed to accrue ESST at a rate of at least one hour for every 30 hours worked, up to a maximum of 48 hours per year, unless the employer chooses a higher cap.
Employees may use accrued ESST for:
(1) The employee’s own illness, injury, health condition, or preventive care
(2) To care for a family member’s illness, injury, health condition, or preventive care
(3) Absence due to domestic violence, sexual assault, or stalking of employee or family member
This means employees can use ESST to care for themselves and their loved ones, as well as take time off for trauma and recovery. Employers must provide notice to employees of their ESST rights at the time of hire and must track and report these benefits to the state.
Expanded protections for nursing mothers and lactating employees
The bill also includes expanded protections for nursing mothers and “lactating employees.” Employers must provide a reasonable amount of break time and a private location, other than a bathroom, for breastfeeding or expressing milk. Employers must also make reasonable efforts to provide a room or other location for nursing mothers who need to pump milk.
The bill increases pregnancy accommodation rights as well. Employers must provide reasonable accommodations for pregnant employees, including providing more frequent or longer breaks for rest, sitting-down work, and modified work schedules or job duties.
Additional Changes to Minnesota State Law
The bill creates numerous other changes to Minnesota state law, including:
– Increase in the minimum wage for large employers, from $9.86 to $10 per hour
– Measures to combat wage theft
– Requirement that companies bidding on state contracts follow Minnesota laws regarding equal pay
– Changes to the enforcement provisions of certain labor and employment statutes
Minnesota joins states with a ban on non-compete clauses
Minnesota has now joined a small contingent of states that have put in place a near-total ban on non-compete provisions. California, North Dakota, and Oklahoma have some of the strictest non-compete laws, while other states, like Massachusetts, have taken steps towards limiting the use of such agreements.
Increased scrutiny of non-compete provisions
This comes at a time of increased scrutiny and skepticism of non-compete provisions from various federal agencies, courts, and state legislatures. In March 2019, Senators Chris Murphy (D-CT) and Todd Young (R-IN) introduced the Workforce Mobility Act, which would ban non-compete agreements nationwide for all low-wage workers. The bill has not yet passed, but it highlights the growing concern over non-compete clauses and their impact on employee mobility and wages.
Reviewing policies and practices
Employers should also review their policies and practices related to accommodations for nursing mothers, lactating employees, and pregnant workers. The Omnibus Jobs Bill and increased protections for workers mean employers need to ensure they are complying with state law. Employers need to actively engage in conversations with employees about what workers want and need, and how they can be supported. Doing so will help employers retain the best and brightest talent, and ensure equity among their workforces.
The Omnibus Jobs Bill SF 3035 includes sweeping changes to Minnesota state employment laws, including a near-complete ban on non-compete clauses and expanded protections for nursing mothers and lactating employees. Employers will need to ensure compliance with the new statewide obligation to provide earned sick and safe time by the start of next year. The increased scrutiny of non-compete clauses nationwide highlights the growing importance of mobility and wages for workers. Employers should review their policies and practices in light of these new legal requirements and actively engage with their workforce to ensure they are providing the best possible support.