Which labor bills passed — and which didn’t — in Minnesota in 2025

Having lost control of the Legislature and confronting a looming budget deficit, Democrats were forced to abandon plans to advance pro-worker legislation and instead defend their gains from the historic 2023 legislative session.

Progressive Democrats were largely successful, resisting cuts to the paid family leave program, the earned sick time law and unemployment benefits for hourly school workers. The notable exception: MinnesotaCare will be repealed for undocumented adults at the end of the year, which was a key priority for Republicans.

“We had real success in defending the gains that we made a couple of years ago, but I do remain frustrated that I spent a lot of my energy defending progress that shouldn’t need to be defended,” said Senate Labor Committee Chair Jen McEwen, DFL-Duluth. “And I was defending it a lot of the time from DFL colleagues.”

Democrats introduced some labor-backed bills, laying out their agenda should they win back state government: a higher minimum wage, pay raises for teachers, staffing ratios for nurses and a path for Uber and Lyft drivers to unionize. None gained traction.

Here’s what passed this year — and some of what didn’t.

Tweaks to paid family leave and earned sick time

The Legislature made changes so small to the state’s paid family leave program and its earned sick time mandate that most workers and employers may never notice them.

Republicans and some moderate Senate Democrats hoped to carve out small businesses and farms as well as reduce the number of paid family and medical leave weeks available in a year, but they were unable to win over any House Democrats. The paid family leave program will launch Jan. 1, while the earned sick time mandate has been in effect since 2024.

The maximum payroll tax cap for the paid family leave program will be reduced from 1.2% to 1.1%. But that’s moot, for now, because the program is slated to start next year with a payroll tax of .88%, with employers paying at least half.

The most significant change to the earned sick time law is that an employer may require that an employee provide documentation — such as a doctor’s note — showing their earned sick or safe leave is covered after two days, down from three days.

Stricter rules on work breaks

The jobs and labor bill strengthens workers’ rights to take breaks, entitling them to paid 15 minute breaks — or more if needed to use the nearest restroom — within each four hours worked and an unpaid meal break of at least 30 minutes if working six or more hours. Previously the law entitled workers to “sufficient time to eat” in an eight hour shift. Workers may voluntarily waive their right to breaks.

Employers who violate the new rules, which take effect Jan. 1, may be required to pay back workers for double the time of the break missed. For example, if an employee wasn’t able to take a 30 minute meal break, the employer would have to pay them an hour’s wages.

The Department of Labor and Industry may levy additional penalties for willful and repeated violations.

Blanket ban on noncompete agreements holds

Democrats successfully beat back an attack on the state’s ban on noncompete agreements, one of their signature pro-worker victories in the 2023 session, with Republicans dropping demands for carve-outs for highly paid workers and those with access to confidential and proprietary information.

It was a top priority for Minnesota’s largest companies, whose lobbyists argued the ban jeopardizes their right to protect valuable scientific discoveries and trade secrets. Democrats rejected that argument, saying the push to revive noncompete agreements was more about stifling competition and suppressing wages than guarding trade secrets, which are protected under other laws.

Unemployment benefits for miners and hourly school workers

Some 630 idled workers at two northern Minnesota mines will be eligible for a full year of unemployment benefits — twice the typical amount — under a provision in the jobs and workforce budget bill.

Extending benefits for miners, which is estimated to cost $15 million, had unanimous support from both Democrats and Republicans. At the same time, Republicans aimed to repeal all unemployment benefits from hourly school workers such as bus drivers, cafeteria workers and teachers’ aides.

That push failed, and the Legislature appropriated an additional $100 million to cover the cost for school districts, in part by canceling some of the funding for a proposed train line between Minneapolis and Duluth.

In 2023, Minnesota became the first state to allow hourly school workers to claim unemployment benefits, which have long been available to workers in other seasonal industries like construction and landscaping.

The benefits provide a valuable safety net for workers making around $17 an hour on average, but school districts complain it makes it harder to fill part-time summer positions and argue the benefits will steal precious resources from classrooms if they’re forced to shoulder the cost.

School districts haven’t yet paid anything for the benefits since the Legislature appropriated $135 million in 2023 to cover its costs. That funding was expected to run dry this summer, leaving school districts on the hook to cover the difference.

In order to pass a compromise education budget with Republicans, House Democratic leaders initially agreed to repeal the benefits in 2029 but that deal was rejected by rank-and-file members.

$700 million infrastructure package

Trade unions celebrated the Legislature passing a $700 million infrastructure package, which will create thousands of well-paid jobs for their members fixing roads, upgrading water treatment plants and renovating government buildings.

High interest rates, President Trump’s trade war and federal funding cuts have soured the economic outlook for construction jobs, which made passage of the infrastructure bill all the more crucial this year.

“This bonding bill isn’t just about concrete and steel – it’s about creating family-supporting careers that allow our members to put food on the table, protect their health care, and secure their pensions,” Joel Smith, president and business manager of LIUNA Minnesota and North Dakota, said in a statement.

The package is much smaller than in recent years. Lawmakers passed a $2.6 billion infrastructure package in 2023 and a $1.9 billion bonding bill in 2020.

The biggest line items include $176 million to the Minnesota Public Facilities Agency to build, upgrade and repair municipal water treatment plants; $84 million to Minnesota State Colleges and Universities system, mostly for asset preservation; and $80 million to the Minnesota Department of Transportation, largely for road and bridge repairs.

Tax breaks for large data centers

Extending tax breaks for large data centers was the second highest priority for trade unions behind a bonding bill — one large data center can cost upwards of $1 billion to build and create hundreds of construction jobs.

Trade unions and business leaders warned that large tech companies like Meta and Amazon would pass over Minnesota for its neighbors, which offer more generous tax subsidies.

The tax exemptions are costly and growing, however, which vexed progressive lawmakers as well as public unions. They argued the state shouldn’t cut taxes for some of the most profitable — and anti-union — companies in the world, while also making budget cuts elsewhere.

The Legislature voted to extend data centers’ tax exemption for purchases of computers, servers, software and cooling and energy equipment to 35 years with a sunset date of 2042. This means that a data center that makes its first purchase in 2042 could continue claiming the exemption until 2077. But lawmakers repealed a tax break on electricity, which will bring in an estimated $140 million over the next four years.

Raises for nursing home workers

Thousands of nursing home workers across Minnesota will see significant pay increases on Jan. 1 under the human services budget bill, which funds raises passed by the state’s new Nursing Home Workforce Standards Board.

Beginning in 2026, certified nursing assistants will earn at least $22.50 an hour, trained medication aides at least $24.50 an hour and licensed practical nurses at least $27 an hour. All other nursing home workers will earn at least $19 an hour. The minimum wages would increase $1.50 per hour across job titles on Jan. 1, 2027.

The minimum rates will raise pay $2 an hour on average for workers earning less than the minimum, according to a fiscal analysis by the Department of Human Services. Labor advocates say the raises will help increase retention and reward workers for caring for the state’s sick and elderly.

The Legislature funded the raises while also having to make future cuts to nursing homes given a looming budget deficit.

Pension boosts for teachers, police and firefighters

Lawmakers directed $80 million to pensions for Minnesota teachers, police and firefighters. The bill, which passed with bipartisan support and was signed by the governor, increases cost-of-living adjustments for police and firefighters and reduces the penalties for teachers who retire before 65 years old.

Teachers hired before July 1, 1989, can retire with full pension benefits when their age and years of service equal 90 (called the “Rule of 90”). Teachers hired after that date have faced steep penalties for retiring before 65 years old. The new law doesn’t restore the Rule of 90 to those teachers, but it does get them close, by lowering the age at which a teacher is eligible for the enhanced early retirement reduction from 62 to 60.

“This ongoing investment will establish a career rule that compares well to the old ‘Rule of 90’ and will go a long way toward easing the teacher shortage that has spread to nearly 90% of school districts in Minnesota,” then-Education Minnesota President Denise Specht said in a statement in May.

New scuba requirements for underwater weed management

Minnesota Gov. Tim Walz signed a bill in May creating new safety standards for workers who use scuba equipment to remove underwater weeds from lakes, following the deaths of two young and inexperienced divers.

Brady Aune and Joe Anderson died two years apart in remarkably similar accidents that their parents blame on the carelessness of their employers. Neither man was certified in scuba diving. In fact, neither had been scuba diving before they were handed oxygen tanks and weighted belts and sent to pull out weeds in deep murky water with little to no supervision.

The law, which had Democratic and Republican authors, requires workers who use scuba equipment to have an open water scuba diver certificate, or more advanced certificate, from a nationally recognized agency. It also imposes safety regulations on companies that employ the divers.

Misclassification fraud impact report

The state will investigate how misclassification fraud affects workers, government programs and tax collections, under a provision in the jobs and labor bill. Misclassification occurs when an employer treats a worker as an independent contractor rather than an employee, robbing them of benefits like overtime pay and workers’ compensation while shorting the state of payroll taxes.

About 316,000 private-sector workers in Minnesota — or 9.4% of workers — may be misclassified as independent contractors, according to an analysis by the union-backed think tank North Star Policy Action.

Based on that analysis, the group estimates workers lost between $2.9 billion and $6.2 billion in 2019 because of payroll fraud, while state government lost between $506 million and $1.3 billion in tax revenue.

Misclassification is poorly policed, according to a recent report by the state Office of the Legislative Auditor, but the extent to which employers commit payroll fraud is hard to measure. The estimate by the North Star Policy Action is likely an undercount.

The first report — to be conducted in coordination between the Department of Labor and Industry, the Department of Employment and Economic Development and the Department of Revenue — is due in January 2027, with additional reports to be completed every six years, contingent upon funding.