Several new and revised statutes passed by the Minnesota Legislature significantly impact the rights and responsibilities of employers. Understanding these changes is important in helping employers minimize the risk of litigation and better handle any employment litigation that does occur. These statutory changes affect the following areas: (1) pre-employment drug testing; (2) salary postings; (3) restrictive employment covenants; (4) access to personnel files; (5) sick and safe time; (6) paid family and medical leave; (7) independent contractor misclassification; (8) pregnancy accommodations; and (9) employees’ rights posters.

Question: Are there any notable changes to pre-employment drug testing methods?

Answer: For otherwise permissible pre-employment drug testing, employers may now use “oral fluid drug testing” for drug, alcohol, and cannabis use. This amendment to the Drug and Alcohol Testing in the Workplace Act becomes effective August 1, 2024. Oral fluid drug testing relies on saliva to provide an accurate and rapid response, rather than expensive and time-consuming laboratory testing at pre-approved labs. At the time of testing, employers must immediately inform the applicant of the test results. If the fluid test result is positive, inconclusive or invalid, the applicant has 48 hours to request testing at an approved testing laboratory, paid for by the employer. An applicant can request subsequent re-tests, but any additional tests must be paid by the applicant.

Question: Are Minnesota employers now required to post salary ranges?

Answer: Yes. Starting January 1, 2025, Minnesota employers, both public and private, with 30 or more employees, must include a “good faith estimate” of the salary range for any job posting, whether the posting is printed or electronic. “Salary range” is defined as the minimum or maximum salary or hourly range of compensation for a job at the time of posting. Beyond monetary compensation, the employer must also include “a general description of all of the benefits and other compensation” the applicant would receive, including all health and retirement benefits. Where an employer does not intend to offer a salary range, a fixed pay rate may be listed instead.

Question: Are service providers permitted to continue to use restrictive employment covenants?

Answer: No. Starting July 1, 2024, service providers can no longer limit customers from directly or indirectly hiring or soliciting their employees in any way. If a service provider held restrictive covenants before July 1, 2024, it must inform its employees that the contract provisions are void and unenforceable. Exempt from this law are workers who provide business consulting through service providers to customers in the computer software development field and intend to receive a permanent job with the customer in the future.

Question: Are all private employers now required to provide employees and former employees access to personnel records?

Answer: Yes. Previously, only private employers with 20 or more employees were required to provide access to personnel records, but now all private employers must provide access if the request is made in good faith. Existing restrictions and protections for personnel records still apply, as set forth in Minnesota Statutes sections 181.960 -181.966.

Question: What changes did the Legislature make to Minnesota’s Sick and Safe Time law?

Answer: Initially passed last year, Minnesota’s new Sick and Safe Time law was amended this year to provide additional protections for workers. Effective immediately, employers who fail to sufficiently provide or allow use of sick and safe time to employees are liable for the time the employees should have been provided, as well as liquidated damages in an equal amount. Employers that keep insufficient records for accurate sick and safe time calculations are also now liable for 48 hours of such time and an equal amount of in liquated damages. The changes also add additional reasons for which an employee can use sick and safe time, namely, making funeral arrangements and addressing financial or legal matters regarding the death of a family member. In a win for employers, they are no longer required to specify sick and safe time on pay statements; instead, employers can “choose a reasonable system” for providing this information. Records must be kept for three years, and sick and safe time usage may now be tracked in increments ranging between fifteen minutes and four hours.

Question: What are the revisions to the Minnesota Paid Family and Medical Leave law?

Answer: The Paid Family and Medical Leave law was amended to make various technical, clarifying, and substantive changes to paid family and medical leave benefits under Chapter 268B. The most significant change is an increase in the payroll tax from 0.77% to 0.88% beginning January 1, 2026. Additionally, the amended law allows employers with 30 or fewer employees to pay lower premium rates if the employer’s average wage is not more than 1.5 times the state’s average wage. Premium rates for employers falling under this threshold are reduced by 25%. These reduced premiums are then further divided into employer and employee portions. Employers must pay at least 25% of the premium and cannot deduct it from employee’s pay. The employee must pay the remaining premium via employer-made wage deductions.

Question: Are there now harsher penalties on employers for misclassifying employees?

Answer: Yes. Effective July 1, 2024, officers or agents responsible for independent contractor misclassifications can be held personally liable for violations of applicable law. Compensatory damages may be available to misclassified workers, plus additional penalties of up to $10,000 for each violation and up to $1,000 for each act of obstruction into misclassification investigations. Moreover, Minnesota Statute, Section 181.723, which formerly provided a separate independent contractor definition for “contractors,” was modified to be applicable for all “construction employees.” Employers in the construction industry must carefully review the new requirements of Section 181.723 to ensure they remain compliant with worker classifications.

Question: What change was made to Minnesota’s Pregnancy Accommodation law?

Answer: When an employee is on leave for an accommodation related to pregnancy, childbirth or related health conditions, employers are required to maintain insurance coverage. This includes coverage under a group insurance policy, group subscriber contract, or health care plan for the employee and any dependents, so long as the employee pays their share of the benefits’ cost.

Question: Is there a new employees’ rights poster required for employers to display at work?

Answer: Yes. The legislature directed the Department of Labor and Industry to create an educational poster providing notice of employees’ rights regarding employer-sponsored meetings or communications on the employer’s opinion about religious or political matters. When available, the notice must be posted in English and the five most common languages spoken in Minnesota.