SF 2533 Minnesota Senate · 2025-2026 Regular Session

Stay-or-pay provisions prohibition provision and that they are unenforceable, and against public policy

SF 2533 prohibits "stay-or-pay" provisions in Minnesota employment contracts, which require workers to pay back costs (like training fees) if they leave before a set period. The bill bans employers from requiring these clauses as a condition of hiring, enforcing them, or threatening to enforce them against employees. Violations carry fines of $1,000-$5,000 per incident, and affected workers can sue for damages including $5,000 per violation plus legal fees. The law applies to contracts entered into on or after July 1, 2025, directly affecting employers and employees across Minnesota.

Issues: ✓ Labor & Employment

Bill status in committee 1 of 4 stages cleared

Introduction

Mar 2025

Committee Review

Floor Vote

Governor

Introduced Mar 13, 2025 Last action Mar 5, 2026

Maddy AI version diff · 1 comparison

What changed between versions

Introduction → 1st Engrossment · 4 edits · Mar 5, 2026

MODERATE

This bill was updated from its introduction to its first engrossment version, incorporating significant policy changes to strengthen protections against unfair 'stay-or-pay' employment contracts. The most notable addition is a new exception that allows employers to require repayment of tuition for transferable credentials under strict conditions, such as separate agreements and no acceleration of payments upon separation. Additionally, the effective date for these new rules was moved from July 1, 2025, to July 1, 2026, giving employers and employees more time to adjust to the new regulations.

Scope change

The bill now includes a specific exemption for tuition repayment agreements for transferable credentials, provided they meet five specific criteria regarding separation from employment and repayment terms.

EXCEPTIONS

Added a new exception allowing repayment agreements for transferable credentials if they are separate from employment contracts, do not require the credential for hiring, specify the repayment amount upfront, allow prorated repayment upon separation, and only require repayment for misconduct terminations.

TIMELINE

Changed the effective date of the law from July 1, 2025, to July 1, 2026, delaying when the new rules apply to contracts.

ENFORCEMENT

Modified the penalty for violations to specify that fines must be paid directly to the aggrieved employee rather than to the state or commissioner.

REQUIREMENT

Added new provisions prohibiting employers from forcing employees to waive Minnesota law protections or agree to adjudicate disputes outside of Minnesota.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 5, 2026

Upper · Passed

Comm report: To pass as amended and re-refer to Judiciary and Public Safety

upper

Mar 13, 2025

Committee

Referred to Labor

upper

Mar 13, 2025

Introduced

Introduction and first reading

upper

1 primary · 2 co-sponsors