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Legal Alert

2014 Minnesota Legislative Session and Regulatory Update: Employment Law Changes

May 29, 2014

The recent session of the Minnesota Legislature resulted in many new laws that impact Minnesota employers. Also, the Department of Human Rights has published important guidance for employers that conduct pre-employment criminal background investigations.  You can read the individual developments by clicking on the links below.

* Criminal Record Investigations
* Medical Cannabis in the Workplace
* Minimum Wage
* Jury Trials
* Changes to Sales Representative Agreement Statute
* The Women's Economic Security Act

New Administrative Guidance on Pre-Employment Criminal Record Investigations
The popular title is “ban the box.” The actual rule prohibits most private employers in Minnesota from asking questions or for information about an applicant’s criminal record until the interview or conditional offer stage of the hiring process. The Minnesota Department of Human Rights is already enforcing the law and has prominently posted a link to Ban the Box: Overview for Private Employers on its website, including an FAQs for Employers to provide guidance on how to comply. 

Recommendation: Review and, if necessary, revise your application form, and train your recruiters and hiring managers on the legal limits of these inquiries. There is a disclosure about criminal records that employers still may make on their applications. Remember that federal law also strictly regulates pre-employment criminal background inquiries.

What Does Legalized Medical Cannabis Mean for the Workplace?
Minnesota has adopted comprehensive legal rules that permit individuals suffering from any of nine specified illnesses to use medical cannabis. The law charges the Commissioner of Health to develop what we expect will be multi-faceted regulations of the manufacture, distribution, lawful use, and other issues with the lawful use of cannabis. Meanwhile, the statute has several workplace provisions with which employers must comply, unless doing so would cause them to violate federal laws or regulations or lose a monetary or licensing-related benefit under federal law or regulations:

    • No discrimination in hiring, firing, or other employment decisions if the employee or candidate for employment is a patient who registered in the new registry for lawful use of medical cannabis;
    • No discrimination against such a patient who tests positive for cannabis components or metabolites, unless the patient used, possessed, or was impaired by medical cannabis on the premises of the place of employment or during the hours of employment; and
    • An employee who tests positive for cannabis on a lawful drug test may explain that result by verifying enrollment in the patient registry.

Recommendation: Revise policies on drug and alcohol involvement, and drug and alcohol testing policies, to conform with the new rules. Note: There are industry-specific exceptions to the new law.

Minimum Wage
Minnesota is raising its minimum wage. Most employers must pay at least the following new state minimum wage, even if they legally comply with the federal minimum wage of $7.25 per hour, because employees are legally entitled to whichever minimum wage is better for them.

Date   "Large Employer"   "Small Employer" 
 ($500,000 + annual gross sales)   (Under $500,000)
 8/1/14  $8.00* ($6.50 to workers under 18)  $6.50 
 8/1/15  $9.00* ($7.25 to workers under 18)  $7.25
 8/1/16  $9.50* ($7.75 to workers under 18)  $7.75
 1/1/18  Rates for all employers are subject to indexing for inflation.

*Large Employers may pay the lower rate applicable to Small Employers during the first 90 consecutive days of employment to an employee under 20 years of age, but they may not displace an employee to bring in a worker at this special, temporary lower rate.

Recommendation: Evaluate your wage program and revise it to the extent the increased minimum wage affects any employees.

Jury Trials Under State Anti-Discrimination Law
Lawsuits against employers under the Minnesota Human Rights Act, which prohibits discrimination against persons in numerous protected classifications, now entitle the plaintiff to a jury trial. This changes the decades-old provision that only judges can decide these cases.

Recommendation: The real impact of this change likely will be on employers with fewer than 15 employees. Those with 15 or more employees already face jury trials under the federal anti-discrimination laws. The Minnesota Human Rights Act covers employers with one or more employees. A jury trial can be more expensive than a court trial, placing an additional burden on small employers or their insurers that are paying for the defense.

Changes to Sales Representative Agreement Statute
If your business has tried to make friendlier laws of other states apply to your contracts with independent contractor sales representatives, the Legislature has now blocked such efforts by amending our statute to make void and unenforceable any contract provision that chooses a different governing law.

Recommendation: Review your agreements with contract sales representatives for compliance with the change to the law. We might also be able to help you with a different strategy to avoid Minnesota’s difficult legal rules.

We Can Help
Please contact a member of Maslon's Labor & Employment Group if you have questions or would like to discuss how recent law changes affect you.


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