2024 Minnesota Legislative Changes Impacting Employers

changes Minnesota gratuities law

The 2024 Minnesota Legislative Session, while not as seismic as 2023, brought many changes that may require adjustments to employers’ practices and policies.

Misrepresentation of Employment Relationship

Individuals who are misclassified as independent contractors will now have a civil right of action under state law.

An owner, partner, principal, member, officer, or agent acting on behalf of an employer that knowingly or repeatedly engaged in any of the statutorily prohibited misclassification activities may be held individually liable. The statute also assigns liability to successors.

The changes impose significant penalties and damages that an entity or individual can accrue per person, per violation, and, in some scenarios, per day. Importantly, the independent contractor test used will follow the same test used for Minnesota workers’ compensation and unemployment benefits. The test is a common law analysis that focuses on a number of factors, including but not limited to: control over the means and manner of the work; ability to terminate the relationship without legal liability; form of payment; investment in supplies, tools, or equipment; and control over where the work takes place.

The legislation will also affect how the state investigates misclassification. The Departments of Labor and Industry, Revenue, Employment and Economic Development, and Commerce, as well as the attorney general — within the attorney general’s enforcement capacity of Minnesota labor standards — have formed a “Partnership” under the Intergovernmental Misclassification Enforcement and Education Partnership Act. The Partnership will have the power to: (1) collaborate on investigations; (2) obtain data from one another; and (3) pursue joint investigations.

The Partnership will undoubtedly provide a mechanism for the state to more aggressively pursue misclassification.

Gratuities Law

For service industry employers, any tips or gratuities received by credit card or other electronic payment must be distributed to the employee, in full, no later than the next scheduled pay period.

The new law goes into effect on Aug. 1, 2024 and will also prohibit employers from deducting a percentage from any tip to cover the credit card fee.

Pay Transparency

Effective Jan. 1, 2025, employers with 30 or more employees at one or more sites in Minnesota are required to include the applicable salary range and a general description of all benefits and other compensation provided within any job posting. Employers are prohibited from leaving salary ranges open ended within job postings.

Employers may want to review salary data to ensure there are no underlying pay equity issues prior to posting open positions.


Have questions regarding these legislative changes and their impact on your business or organization? Contact us and let our Minnesota HR and legal experts help you make any necessary adjustments to your employment practices and policies.