Summary of July 2025 Labor Law Updates for Minneapolis, Minnesota
Welcome to HKM Employment Attorneys’ monthly legal roundup for Minnesota labor law. Prepared by our Minneapolis team and designed for employees, HR professionals, and compliance leaders, this summary highlights real, verifiable legal developments in July 2025 that affect workplace rights and employer obligations in the state. Stay informed to ensure compliance and mitigate risks.
If you’d like assistance interpreting these developments or updating workplace policies, HKM Employment Attorneys is here to help. Contact us via hkm.com for guidance tailored to your organization’s needs.
Thank you for trusting HKM to keep you informed about Minnesota labor law and July 2025 employment updates.”
Earned Sick & Safe Time (ESST) Changes — Legislation & Guidance
Date: July 1, 2025
Summary: Employers may now require notice for unforeseeable ESST absences as “reasonably required”—a modification from the previous “as soon as practicable” standard. Employers may ask for documentation when an employee takes ESST for more than two consecutive scheduled workdays. Employees are permitted to voluntarily trade shifts to cover ESST hours; however, employers cannot require them to do so.
Implications: Employers should update ESST policies and employee handbooks accordingly. The revised notice standard allows greater flexibility in policy design, while the documentation requirement and shift-trading clarity may affect scheduling practices and absenteeism tracking.
Minnesota Paid Leave (MPL) Premium Cap Reduction — Legislative Update
Date: Effective July 1, 2025 (rules finalized June 16)
Summary: The maximum MPL payroll tax cap is reduced from 1.2% to 1.1% of wages. The initial premium rate remains 0.88%, effective January 1, 2026. Employers may share the cost with employees at 50/50, regardless of whether they use the state plan or an equivalent plan.
Implications: Organizations should adjust budget projections and payroll systems to reflect the revised cap. Although implementation begins in 2026, planning ahead will ensure a smoother rollout.
Independent Contractor Misclassification — Construction Sector
Date: Effective July 1, 2025
Summary: For the construction industry, the legal risk of misclassifying employees as independent contractors increases. To qualify as a contractor, individuals must have an EIN, Minnesota tax ID (if required), and necessary professional licenses and registrations.
Implications: Construction firms should assess current worker classifications and ensure documentation and compliance with licensing and tax requirements to avoid fines and disputes.
Doctor’s Note Requirement under ESST
Date: Effective July 1, 2025
Summary: Employers gain the ability to request a physician’s note after two or more days of absence under the ESST law.
Implications: This shorter threshold means employers must communicate this requirement clearly to employees. HR teams should synchronize this update with ESST policy revisions.
Federal Investigation into State Hiring Practices — Enforcement Action
Date: Investigation announced July 10, 2025
Summary: The U.S. Department of Justice (DOJ) launched a civil rights investigation into Minnesota’s Department of Human Services (DHS) over a policy requiring hiring supervisors to justify selecting candidates from non‑underrepresented groups. The DOJ contends the policy may constitute race‑ or sex‑based employment discrimination under federal civil rights law.
Implications: This high‑profile investigation may reshape affirmative action and DEI initiatives in the public sector. Employers should closely monitor outcomes—particularly state agencies and larger organizations implementing similar policies.
Other Notable Legislation Taking Effect July 1, 2025
Type: Broad Legislative Changes with Labor Implications
Summary: Employers may now request a doctor’s note after two or more days of sick leave—consistent with the ESST update.
Additional bills tied to the two‑year budget cover various areas beyond labor law (e.g., public events, education, and youth protection).
Implications: The change aligns with ESST reforms but should also be cross-checked for consistency across policies. Employers should note these broader statutory changes and assess whether any other indirect labor impacts arise.
Conclusion: Looking Back on Minnesota’s Labor Law Updates from July 2025
As Minnesota courts continue to evolve employee protections—addressing wrongful termination, wage-and-hour, discrimination, contract review, whistleblowing, and ethics investigations—you need counsel familiar with local and federal labor law. At HKM Employment Attorneys in Minneapolis, our dedicated team—including Blaine Balow, Amanda Crain, Emma Denny, Evelyn Doran, Drew Kudlinski, and Mary Olszewska—focuses solely on representing employees in contract disputes, wage claims, and more. We offer thorough contract reviews, EEOC and state filing assistance, and unwavering advocacy under our no‑fee‑unless‑we‑win policy. If the latest legal developments have you reconsidering your rights at work, contact our Minneapolis office to discuss how we can help you pursue meaningful resolution.
