SF2533

Purpose of the Bill

The purpose of the bill is to prohibit and render unenforceable stay-or-pay provisions in employment agreements. This means that agreements requiring employees to remain in their jobs for a specified period or pay a penalty if they leave early would be against public policy in Minnesota.

Main Provisions

• The bill specifically targets and prohibits stay-or-pay provisions within employment contracts. These are clauses where employees must either stay with the company for a certain time or pay a financial penalty upon leaving.
• It proposes changes to Minnesota Statutes to include these prohibitions, ensuring that such provisions are considered unenforceable within the state.

Significant Changes to Existing Law

• The bill amends the current Minnesota Statutes section 177.27, subdivision 4, by updating compliance orders to include the prohibition of stay-or-pay provisions.
• This also involves potential changes to enforcement and compliance procedures by the commissioner, who can issue orders to employers who violate this provision.
• Employers are required to respond if they wish to contest compliance orders within 15 calendar days, following existing procedures.

Relevant Terms

• Stay-or-pay provisions
• Employment contracts
• Public policy
• Compliance orders