LABOR AND EMPLOYMENT DESK BOOK. USA - MINNESOTA Briggs and Morgan, P.A.

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1 LABOR AND EMPLOYMENT DESK BOOK USA - MINNESOTA Briggs and Morgan, P.A. CONTACT INFORMATION Michael T. Miller Briggs and Morgan, P.A Do you have a plant closing law in your jurisdiction and if so, what does it require? (For U.S. jurisdictions, please answer: Is there a Baby WARN Act in your state and if so, what does it require?) Yes see Minn. Stat. 116L.976. The statute primarily mirrors the requirements of the federal WARN Act, but also requires that the employer provide the Commissioner of Employment and Economic Development with the names, addresses, and occupations of the employees who will be or have been terminated. 2. Are there special rules on releases/waivers in your jurisdiction? Yes see Minn. Stat. 363A.31. Waivers/releases of claims arising under the Minnesota Human Rights Act require a rescission period of 15 calendar days following execution of the waiver/release in order to be enforceable. 3. What are the equal employment opportunity/ non-discrimination categories in your jurisdiction (For U.S. jurisdictions, please answer: Are there protected categories beyond Title VII in your state?) Yes see Minn. Stat. 363A.08. In addition to those categories protected by Title VII (race, color, religion, sex, and national origin), the Minnesota Human Rights Act prohibits discrimination on the basis of the following protected categories: creed, marital status, status with regard to public assistance, membership or activity in a local commission, disability, sexual orientation, and age.

2 4. What are the minimum wage and overtime rules (and exemptions) in your jurisdiction? Minimum Wage Rules (see Minn. Stat ): Nonexempt employees of a large employer (i.e., an enterprise whose annual gross volume of sales made or business done is not less than $625,000 exclusive of excise taxes at the retail level that are separately stated) must be paid at a rate of at least $6.15 per hour. Nonexempt employees of a small employer (i.e., an enterprise whose annual gross volume of sales made or business done is less than $625,000 exclusive of excise taxes at the retail level that are separately stated) must be paid at a rate of at least $5.25 per hour. Additionally, during the first 90 consecutive days of employment, an employer may pay an employee under the age of 20 a wage of $4.90 an hour. However, an employer may not take any action to displace any employee, including a partial displacement through a reduction in hours, wages, or employment benefits, in order to hire an employee at the $4.90 per hour wage rate. Overtime Rules (see Minn. Stat ): Nonexempt employees must be paid at a rate of one and one-half times their regular rate of pay for all hours worked in excess of 48 hours during any workweek. Note that the trigger for overtime under Minnesota law is 48 hours and not 40 hours, as under the Fair Labor Standards Act. Exemptions (see Minn. Stat , Subd. 7 & ): Exemptions under Minnesota law include the following: individuals employed in a bona fide executive, administrative, or professional capacity, or salespersons who conduct no more than 20% of sales on the premises of their employer (see Minn. Stat , Subd. 7(6)); health care workers who agree to a 14-day workweek (see Minn. Stat , Subd. 2); motor vehicle salespeople and mechanics (see Minn. Stat , Subd. 3); constructors of on-farm silos (see Minn. Stat , Subd. 4); and other miscellaneous exemptions listed at Minn. Stat , Subd. 7 (defining employee for purposes of the Minnesota Fair Labor Standards Act). 5. Is there employment-at-will, or some other rule, in your jurisdiction? What are the exceptions? Employment is presumed to be at will in Minnesota. Exceptions to the general rule of at-will employment include situations in which the employer and employee contract for employment for a specified amount of time or for termination only for cause. An Employee Handbook or Policy Manual that does not sufficiently disclaim contractual intent may give rise to an enforceable employment contract. Additionally, the Minnesota Whistleblower Act prohibits employers from terminating, disciplining, or otherwise discriminating against an employee for certain reasons, such as whistleblowing, participating in an investigation or hearing, or refusing to violate the law. See Minn. Stat What are the legal obligations upon terminating an employee in your jurisdiction? An employee who is involuntarily terminated must be paid his or her final wages within 24 hours of the employee s demand. See Minn. Stat An employee who voluntarily quits or resigns usually must be paid his or her final wages by the first regularly scheduled

3 payday following the employee s last day of employment. See Minn. Stat Additionally, a terminated employee may request that his or her employer state the reason for the termination in writing within 15 working days of the termination, in which case the employer must provide written notice of the reason for termination within 10 working days of receiving the request. See Minn. Stat Are there any family and/or medical leave laws in your jurisdiction, and if so, what do they require? (For U.S. jurisdictions, please answer: Are there family and/or medical leave laws in your state beyond FMLA and if so, what do they require?) Yes. Minnesota law requires that employers provide eligible employees with up to 6 weeks of unpaid leave in connection with the birth or adoption of child. See Minn. Stat Employers who provide paternity or maternity leave for biological parents must also provide such leave for adoptive parents. See Minn. Stat Minnesota law also requires that employers provide employees with up to 16 hours of unpaid leave during a 12-month period to attend school conferences or other school-related activities for their children if those activities cannot be scheduled during non-work hours. See Minn. Stat In addition, employers must allow employees to use personal sick leave benefits to care for a child with an illness or injury on the same terms that the employee would be able to use the personal sick leave benefits for his or her own illness or injury. See Minn. Stat Minnesota law also requires that employers provide up to 10 working days of unpaid leave for an employee whose immediate family member has been injured or killed while engaged in active service as a member of the United States Armed Forces. See Minn. Stat Furthermore, employers must provide an employee with unpaid leave (not to exceed one day s duration in any calendar year) in order to attend send-off or homecoming ceremonies for an immediate family member who has been ordered into active service as a member of the United States Armed Forces. See Minn. Stat Please list any miscellaneous, interesting or oddball laws in your jurisdiction, and state under what circumstances they pertain. Employment References: Minnesota law protects an employer from civil actions based on the disclosure of certain information about former employees to prospective employers unless the former employee can establish by clear and convincing evidence that: (1) the information was false and defamatory; and (2) the employer knew or should have known the information was false and acted with malicious intent to injure the current or former employee. See Minn. Stat Lawful Consumable Products: With certain limited exceptions, Minnesota law prohibits an employer from terminating or discriminating against an employee because the employee used a lawful consumable product (e.g., food, alcoholic or nonalcoholic beverages, or tobacco) if the use occurs off of the employer s premises and during nonworking hours. See Minn. Stat

4 Employee Indemnification: With certain limited exceptions, Minnesota law requires that an employer defend and indemnify an employee for civil damages, penalties, or fines levied against the employee if: (1) the employee was acting in the performance of the duties of his or her position; (2) the employee was not guilty of intentional misconduct, willful neglect of the duties of the employee s position, or bad faith; and (3) the employee has not been indemnified by another person for the same damages, penalties, or fines. See Minn. Stat Does your jurisdiction have a law requiring employers to give employees access to, or a copy of, their personnel records? Yes see Minn. Stat et seq. Minnesota law requires that employers permit employees to review their personnel files at least once every six months, except that after termination of employment, an employer must permit a former employee to review his or her personnel file at least once per year for as long as the personnel file is maintained. See Minn. Stat Minnesota law also requires that employers provide new hires with written notice of their rights and the available remedies with respect to access to and review of personnel files. See Minn. Stat Does your jurisdiction outlaw or restrict drug tests, alcohol tests, genetic tests or any other kind of testing? Yes see Minn. Stat et seq. Minnesota law requires that drug and alcohol testing only occur pursuant to a written policy that must contain certain statutorily required information, and even then, the testing can only occur if certain conditions are met. 11. Does your jurisdiction have any special rules on the payment of sales commissions? Yes see Minn. Stat , Subd. 2. The statute prohibits employers from altering the method of payment, timing of payment, or procedures for payment of commissions earned through the last day of employment after the employee resigns or is terminated if the result is to delay or reduce the amount of payment. Additionally, Minn. Stat addresses the payment of earned commissions to commissioned salespersons who either resign or are terminated and who are not subject to the other Minnesota statutes addressing final payment of wages (Minn. Stat ) because they are independent contractors. 12. What are the basic rules on enforcing non-competes and related agreements in your jurisdiction? Non-competes and related agreements (e.g., non-solicitation or confidentiality agreements) are enforceable under Minnesota law, but they must be narrowly tailored to protect the employer s legitimate business interests with respect to length of time, scope of activity prohibited, and geographical restrictions. Minnesota courts may, in their discretion, blue pencil (i.e., modify) unreasonably broad non-competes or related agreements so as to make them enforceable. Non-competes and related agreements also require adequate consideration to be enforceable. Ordinarily, if the non-compete or related agreement is part of the initial contract for hire and is executed before employment begins, the offer of

5 employment is sufficient consideration. However, when the non-compete or related agreement is executed after the employment relationship has begun, independent consideration is required.

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