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 written agreement that requires an employee to pay the employer if they leave before a specified time, which may include reimbursement for training or other costs. The bill amends Minnesota Statutes 2024, section 177.27, subdivision 4, to include new language that allows the commissioner of labor and industry to issue compliance orders related to these provisions. It also introduces a new section, 181.989, which outlines the definitions, prohibitions, enforcement mechanisms, and civil actions related to stay-or-pay provisions.

Under the new law, employers are prohibited from presenting or enforcing stay-or-pay provisions, and any violation can result in fines ranging from $1,000 to $5,000 per occurrence. Employees or prospective employees can bring civil actions against employers for violations, seeking damages and attorney fees. The bill specifies that these provisions will not affect other legal rights and remedies and will take effect on July 1, 2025, applying to contracts entered into after that date.

Statutes affected:
Introduction: 177.27