On Monday, May 13, the Minnesota Senate approved the conference report for the partisan labor policy omnibus bill. This legislation passed out of the Senate on a party-line vote, and it now awaits the governor’s signature. When this legislation first passed out of the Senate, it did little to increase employment opportunities or make Minnesota a competitive place to grow a business. Upon its return, the bill now contains controversial Democrat language that was never approved by the Senate.

“The labor policy omnibus contains burdensome policies that will ultimately increase costs for businesses and result in job loss and decreased earnings for Minnesota workers,” Senator Gene Dornink (R-Brownsdale), Republican lead of the Senate Labor Committee, said. “The conference committee, which was made up of only Democrat members, added in partisan language dealing with employment contracts. This provision was never properly vetted by the Senate. It is disappointing that Democrats chose not to work in a bipartisan manner to improve labor and industry in Minnesota.”

The new provision prevents a company or partnership that provides services to a customer from restricting the customer from directly or indirectly soliciting or hiring one of their employees. Additionally, the contract a service provider signs with a customer cannot restrict or prohibit the customer from hiring the employees either. This policy was never heard by the Senate Judiciary and Public Safety Committee or on the Senate floor.

Notably, the labor policy omnibus bill also modifies Minnesota’s minimum wage rates. This includes a provision to allow the Minnesota Department of Labor and Industry to adjust the minimum wage based on inflation, up to 5% annually. Currently, there is a cap of 2.5% on the adjustment.

Additionally, the bill contains key language to:

• Remove the distinctions between large and small employers from the minimum wage; section of the Minnesota Fair Labor Standards Act;
• Require businesses to pay the 3-4% service fee on credit card tips;
• Expand prevailing wage for projects intended for use by the public; and
• Place additional restrictions on minor electrical work in non-owner-occupied housing.