The Labor Committee advanced a transformative bill focused on worker protection, expanding access to apprenticeships, and access to earned sick and safe time. Workers in nursing homes, refineries, warehouses, construction, food processing, and public employment will see more protections and a greater voice in their workplace.
Paid Family & Medical Leave
The legislature passed a signature investment in Minnesota families and economic security, passing the state’s first Paid Family and Medical Leave Program. The program will be available to Minnesotans beginning January 1, 2026, and will provide partial wage replacement for workers needing leave related to the birth, adoption, or foster placement of a new child, leave for their own medical need or to care for a loved one, leave for service in the armed forces, or safety leave related to domestic abuse, sexual assault, or stalking. Start-up administrative costs and a beginning balance in the fund will be supported by a one-time appropriation.
Senate DFLers took a historic step to support the health, economic security, and wellbeing of Minnesotans and their families by passing the state’s first ever Paid Family and Medical Leave Program. The program will support all workers by offering partial wage replacement and job protections if they need to access leave to care for themselves or a loved one, to welcome a new child into their family, to serve in the military, or need safety leave.
The program established would allow workers to access earned benefits for up to 12 weeks of benefits under the bill related to the applicant’s serious health condition or pregnancy, or up to 12 weeks of benefits under the conference report for bonding, safety leave, qualifying exigency, or family care. If a worker seeks to use more than one type of leave in a single year, their total number of weeks of benefits is capped at 20 weeks. The bill included a one-time appropriation for start-up costs and to establish an initial base in the account for benefits. The program is supported on an ongoing basis by a 0.7% payroll premium, shared evenly between employers and employees (0.35% each).
All workers would receive 90% of their wages up to 50% or less of the state’s average weekly wage. 50% of the average weekly wage for 2023 is equal to $643, approximately $33,462 per year. For wages between 50% and 100% of the state’s average weekly wage, workers would receive 66% of those wages as a benefit. Lastly workers would receive 55% of wages exceeding the state’s average weekly wage. Total benefits are capped at an amount equal to the state’s average weekly wage. Minnesota’s statewide average weekly wage for 2023 is $1,287.
The bill allows employers to substitute a private plan, so long as program elements including benefit amounts and duration of leave are at least as generous as the state program. Employers may also choose to offer stronger benefits by “topping off” the state program with additional dollars or weeks for their employees.
Minnesota joins 11 other states and Washington D.C. in passing a Paid Family and Medical Leave law, and is the first state in the Midwest to do so.
Paid Family and Medical Leave has proven to lead to better health outcomes for children and mothers, reduces use of other public programs and services, expands the number of individuals able to join the workforce, and reduces turnover in employment. The program is a transformative investment in making Minnesota the best state to live, work, and raise a family.
Earned Sick and Safe Time
The omnibus Labor Budget included Earned Sick and Safe Time requirements that have been blocked in divided government for several years. Earned Sick and Safe Time requirements will ensure that all employees working more than 80 hours per year receive a minimum of one hour of Earned Sick and Safe Time for every 30 hours worked.
No employee is required to receive more than 48 hours of sick time per year, though employers would still be able to offer faster accruing paid leave and/ or a higher amount of paid leave per year. In addition, no employer is required to have leave accruals, including ESST hours carried over from previous years, exceed 80 hours. Most existing PTO offerings that provide pay at an employee’s regular hourly rate and allows employees to use time for the purposes listed below would satisfy the new requirements.
Expanding access to earned sick and safe time is a significant step in closing racial gaps in Minnesotan’s access to paid time to care for themselves or a loved one, and to increase economic security and ability to access healthcare for low-income Minnesotans.
Warehouse Worker Safety
The Labor budget included provisions creating new labor standards protecting workers at large warehouses (over 250 employees at one site or 1,000 or more across multiple warehouses) in the state. The labor standards regulate worker quotas, which have been linked to dramatically higher injury rates in certain warehouse facilities.
Proposals to protect warehouse workers arose after Amazon warehouses, including a major facility in Shakopee, Minnesota, implemented electronic monitoring to track worker quotas that employees were unaware of. Workers testified in front of the legislature that they arrived for shifts to find their key card deactivated because they had been fired for falling short of a quota- without their awareness of their firing, the quota, or their progress towards the quota.
Under the new law, employers will have to provide notice to employees if they are held to a certain production speed standard or similar quota. In addition, workers will be able to request a copy of their work speed data. The legislation also includes triggers for investigations by MNOSHA if a large warehouse has a worker injury rate at least 30% higher than comparable facilities.
Refinery Safety
The legislature passed a critical worker and community safety provision requiring a skilled and trained workforce at oil refineries in Minnesota. The refinery safety bill has been debated since the 2021 legislative session, after a Minnesota refinery dismantled a full-time fire department and moved towards greater use of out-of-state contractors with lower skill and job site safety levels that apprenticed Minnesota workers. Refineries are high hazard job sites, particularly facilities that use highly flammable and toxic chemicals like hydrogen fluoride in the refining process.
Despite repeated efforts from Senate and House DFLers, the refinery safety bill had failed to become law under two years of divided government. The final vote earned bipartisan support after renewed efforts under DFL leadership.
The bill requires that owners or operators of a petroleum refinery use contractors with minimum percentages of apprenticed workers for all positions at a refinery where there is an applicable apprenticeship program. Those percentages would start at 30% and would phase in to higher levels.
New labor standards contained in the refinery safety bill will take effect January 1, 2024 and will be fully phased in beginning January 1, 2026.
Ban on Non-Compete Agreements
The omnibus Labor bill included a ban on non-compete agreements in employment contracts. Non-compete clauses are a relatively widespread and growing practice that employers use to restrict workers from working with a competitor or starting their own competitive business after leaving their job. Because the agreements are anti-competitive, they broadly tend to suppress worker mobility and wages. The Federal Trade Commission (FTC) recently proposed a new rule banning non-competes, which the commission estimates could increase wages by nearly $300 billion per year nationally.
Workers across industries and income levels are subject to non-compete clauses, including warehouse workers, hairstylists, sandwich makers, and more. Some studies have found that as many as 40% of workers in the U.S. are impacted by a non-compete clause, though others place the number closer to 20%.
Minnesota joins states including North Dakota, California, and Oklahoma in banning non-compete agreements, while many other states have imposed significant restrictions on non-compete agreements.
The Labor omnibus bill also banned restrictive franchise agreements, a similar practice that seeks to restrict worker mobility and often suppresses wages. Restrictive franchise agreements generally are mandated from the larger parent companies on locally owned franchises, preventing the local franchises from soliciting or hiring workers that work or have worked for other franchise locations. This practice may also be referred to as a “no-poach” agreement and are already illegal in most circumstances. Minnesota law will now remove the franchise loophole from bans on no-poach agreements.
Access to Apprenticeships
The omnibus Labor bill contained several investments in expanding access with apprenticeships, with a particular emphasis on inclusion of women, BIPOC Minnesotans, and veterans. The total investment is in excess of $6 million over the biennium, including:
- $450,000 for Helmets to Hardhats, supporting veterans in transitioning from service to apprenticeships in the building trades.
- $1.8 million for the Labor Education Advancement Program (LEAP), which facilitates the participation and retention of women, people of color, and indigenous people in registered apprenticeship programs.
- $3 million for Clean Energy Economy Apprenticeships supporting registered apprenticeship programs in expanding opportunities to train and upskill workers in clean technologies and infrastructure within the structure of existing apprenticeship programs.
- $800,000 for Building Strong Communities, an apprenticeship preparation program focused on recruiting and preparing women and BIPOC Minnesotans for careers in the construction industry.
- $300,000 for the Career Pathways Program, a partnership between the Minnesota Virtual Academy and the Operating Engineers (IOUE Local 49) apprenticeship program, providing virtual opportunities for Minnesota High School Students to access pre-apprenticeship training while earning High School credit.
Protections for Migrant, Agricultural and Food Processing Workers
The COVID-19 pandemic brought new focus to the critical importance of the food processing workforce, as well as the hazardous conditions that many work under. Senate DFLers responded to those concerns by passing legislation to protect migrant, agricultural, and food processing workers. Provisions include expanding notice requirements, added enforcement mechanisms to the Packinghouse Workers Bill of Rights, a right to refuse to work under dangerous conditions, and requiring large meat and poultry packing plants to collaborate with workers to adopt a safety plan to minimize and prevent musculoskeletal disorders.
Duty to Defend
The Labor Omnibus budget contained a ban “Duty to Defend” contract language on public construction projects, ensuring that smaller subcontractors do not have to bear general contractor’s legal defense costs if a claim is brought for defects or injuries on the construction site.
Duty to Defend clauses in contracts can also increase the business insurance costs for subcontractors, creating added costs for smaller companies that are more likely to be women or BIPOC owned than construction industry businesses as a whole. The Minnesota Council on Latino Affairs strongly supported this legislation, arguing in written testimony that it will lead to increased contracting opportunities for disadvantaged businesses, particularly those owned by people of color.
Ban on Captive Audience Meetings
The legislature passed a ban on captive audience meetings, where employers require employees to listen to information not related to their job duties, including political speech or religious speech. Captive audience meetings often occur when employers are seeking to bust a union drive and have previously been protected as free speech for employers. The legislation does not seek to restrict an employer’s speech, but instead removes their ability to compel employees to listen to speech that is not related to their job duties.
Public Employee Labor Relations Modifications
A number of provisions modifying the Public Employee Labor Relations statutes were included in the Labor omnibus bill, strengthening worker voices and protections in the workplace. These changes include lifting the ban on discussing public employment staffing levels in collective bargaining, allowing Tier 1 licensed teachers, adult basic education teachers, and early learning teachers to join collective bargaining units, and allowing for majority verification procedures to take the place of a union election.
Ergonomics
The Labor omnibus bill created a nation leading ergonomics program to develop best practices and policies to reduce repetitive stress injuries. The initiative will focus on the three industries with the highest rates of those injuries: warehouses, meatpacking, and health care.
The Ergonomics program will include training, education, and outreach activities, research and analysis of workplace ergonomic injuries, and enforcement. The program includes safety grants to employers for ergonomic improvements or implementation of ergonomic processes.
Construction Worker Wage Protection
The Labor omnibus bill also included new protections for construction industry workers that have become victims of wage theft. The industry sometimes uses multiple layers of subcontracting relationships to obscure who the direct employer of a worker is, preventing the prosecution of wage theft on job sites to the benefit of both a subcontractor stealing wages and a general contractor accepting a significantly lower bid for a subcontract- one that would not be possible for a subcontractor paying the full wages of their employees. Provisions in the labor bill would allow workers to hold general contractors accountable for the wage theft of their subcontractors, requiring the industry to police itself, rather than allowing general contractors to continue using subcontractors that they have reason to suspect or know use unfair labor practices.
Vetoed by the Governor:
Uber/ Lyft Driver Protections and Minimum Compensation Bill Following passage by the legislature in the final weekend of session, Governor Walz vetoed a bill that would have provided legislative requirements for transportation network companies (TNC) like Uber and Lyft. The bill would have mandated standards within TNC driver deactivation policies, and also established minimum compensation on both a per mile and a per minute basis.
