MN SF2533

Stay-or-pay provisions in employment contracts are declared unconscionable, against public policy, and prohibited, with such provisions defined as agreements requiring employees to pay employers if they leave before a specified time period

Employers violating the prohibition face fines of $1,000 to $5,000 per violation payable to the aggrieved employee, with each instance of presenting, requiring, enforcing, or threatening to enforce such provisions constituting a separate violation

Employees may bring civil actions for violations and receive injunctive relief, actual damages, an additional $5,000 per violation, plus reasonable costs and attorney fees

An exception exists for tuition repayment agreements for transferable credentials when the agreement is separate from employment contracts, specifies amounts in advance, provides prorated repayment, and does not require repayment if the worker is terminated (except for misconduct)

Effective July 1, 2026, applying to contracts entered into on or after that date, with employees who primarily reside and work in Minnesota protected from contract provisions requiring out-of-state adjudication or depriving them of Minnesota law protections