Minnesota HR Legislative Update

Legislation that is both important and relevant to most employers in Minnesota is making its way through committees. The following is a brief review of some of the more controversial proposals that are being considered, some set to be voted on by the House today (Friday, May 3):

Minnesota Proposed Minimum Wage Increase: Currently, Minnesota’s minimum wage is $6.25/hour for businesses that have annual revenues of more than $625,000 and it’s $5.25 for businesses with less. Most businesses, however, are required to abide by the federal minimum wage, which is $7.25. The MN House of Representatives is expected to have a floor vote on increasing the Minnesota minimum wage, which would effectively slingshot the federal minimum wage to $9.50/hour for workers in this state. All eyes are on the Senate, which has a similar bill but would only nominally raise the minimum wage to around $7.75/hour. If Minnesota does pass a $9.50/hour minimum wage it is expected to be the highest state minimum wage in the U.S. (some cities have higher).

Minnesota Proposed Overtime Changes: Currently, employers in Minnesota are required to pay overtime wages at a rate of 1.5x the employee’s regular rate for all hours worked over 48 in a workweek. Similar to the minimum wage applicability, most employers are required to abide by the federal standard which is 1.5x pay for all hours worked over 40 in a work week. The MN House is set to take a vote on reducing the Minnesota law requiring overtime pay to the federal level of 40 hour per week, in line with the federal threshold. Although it may not impact most employers, for certain small businesses, agriculture employers, home health care employers, and non-profits, this could have significant application.

Background Checks Limited: Both the Senate and the House have similar bills restricting most employer’s ability to conduct background checks on applicants. As drafted, the restriction on background checks would be limited to post-offer of employment only. Although most employers who do background checks on new employees do so post-offer already, for those companies that do background checks pre-offer of employment, this proposed legislation would seemingly curtail that practice.

 
 
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