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SF2533 (Legislative Session 94 (2025-2026))

Stay-or-pay provisions prohibition provision and that they are unenforceable, and against public policy

Related bill: HF2567

AI Generated Summary

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

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 12, 2025SenateFloorActionIntroduction and first reading
March 12, 2025SenateFloorActionReferred toLabor

Citations

 
[
  {
    "analysis": {
      "added": [
        "No additions were made in the current amendment."
      ],
      "removed": [
        "No sections were removed in the current amendment."
      ],
      "summary": "This statute section governs the issuance of compliance orders by the commissioner related to labor standards.",
      "modified": [
        "Clarifies procedures and conditions under which the commissioner may issue compliance orders."
      ]
    },
    "citation": "177.27"
  }
]

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