This bill aims to prohibit "stay-or-pay" provisions in employment contracts, declaring them unenforceable and against public policy. A stay-or-pay provision is defined as any agreement requiring an employee to pay the employer if they leave before a specified time, which could include reimbursement for training or other costs. The bill outlines that employers cannot present or enforce such provisions, and any waiver of this prohibition is invalid. Violations will result in fines ranging from $1,000 to $5,000 per incident, payable to the affected employee. However, there are exceptions for agreements related to tuition repayment for transferable credentials, provided they meet specific criteria.

Additionally, the bill amends Minnesota Statutes 2024, section 177.27, subdivision 4, to include the new provision regarding stay-or-pay agreements and introduces a new section, 181.989, detailing the definitions, prohibitions, enforcement mechanisms, and civil actions available to employees. It also ensures that employees cannot be required to adjudicate claims outside of Minnesota or be deprived of protections under Minnesota law. The effective date for these changes is set for July 1, 2026, applying to contracts entered into after that date.

Statutes affected:
Introduction: 177.27
1st Engrossment: 177.27