This bill aims to prohibit and render unenforceable "stay-or-pay" provisions in employment contracts, which require employees to pay their employer if they leave before a specified period. The bill amends Minnesota Statutes 2024, section 177.27, subdivision 4, by adding a new section, 181.989, that defines stay-or-pay provisions and outlines their prohibition as unconscionable and against public policy. Employers are not allowed to present or require such provisions as a condition of employment, and any attempt to enforce them is also prohibited.

Additionally, the bill establishes penalties for employers who violate this prohibition, including fines ranging from $1,000 to $5,000 for each violation. Employees or prospective employees can bring civil actions against employers for violations, seeking injunctive relief, actual damages, and additional compensation. The provisions of this bill will take effect on July 1, 2025, and will apply to contracts entered into after that date.

Statutes affected:
Introduction: 177.27