SF3662

Purpose

This bill amends the Minnesota Human Rights Act to change how disparate impact in employment is treated. It clarifies when an employment practice that harms a protected class raises liability and introduces requirements for justifying such practices. It also specifies how AI-based practices are to be viewed under the law.

Main Provisions

• Disparate impact standard in employment

  • If a complainant shows that an employment practice causes a statistically significant adverse impact on a protected class, the employer must justify the practice by proving it is manifestly related to the job or significantly furthers an important business purpose.

• Opportunity to show a less harmful alternative

  • If the employer establishes this justification, the charging party may win by showing the existence of a comparably effective alternative practice that would cause a significantly lesser adverse impact on the protected class.

• Liability for discriminatory effect regardless of intent

  • The Minnesota Human Rights Act imposes liability for practices that have a discriminatory effect, even if there was no intent to discriminate.

• What counts as discriminatory effect

  • A practice has a discriminatory effect if it actually or predictably results in a disparate impact on a protected class or if it creates, reinforces, or perpetuates segregated housing patterns.

• Predictable disparate impact

  • A practice is considered to predictably result in a disparate impact if there is evidence that the practice will cause a disparate impact even before it is implemented.

• Standing to bring claims

  • A single person can pursue a claim based on a practice that harms a group of individuals if that person has been injured by the practice.
  • The commissioner or a person who may bring an action does not have to demonstrate exactly which specific policies within a group cause the disparate impact.

• Legal exceptions for discriminatory practices

  • Practices with a discriminatory effect may still be lawful if they are necessary to achieve substantial legitimate nondiscriminatory purposes and there is no feasible alternative practice that would achieve the same purpose with less discriminatory effect.

• Artificial intelligence (AI)

  • A practice that uses artificial intelligence is considered to have a discriminatory effect if it actually or predictably results in a disparate impact on a protected class or contributes to segregated housing patterns.

How this changes enforcement and outcomes

• Shifts the burden of justification to employers when a practice harms a protected class, while allowing a path to show a less discriminatory alternative.
• Confirms that discriminatory effect claims can be based on groups or policies without needing to identify every specific policy causing the impact.
• Adds AI-focused concerns, making AI use a potential source of discriminatory effect under the Act.

Significance and Observations

• Bridges concerns about intent with actual effects, reinforcing protection against practices that harm protected classes even if not designed to do so.
• Encourages employers to assess job-related relevance and business justifications for practices with known adverse impacts.
• Introduces the possibility of substituting less harmful, comparably effective practices to reduce discrimination.

Relevant Terms

• disparate impact
• discriminatory effect
• protected class
• statistically significant adverse impact
• employment practice
• manifestly related to the job
• important business purpose
• comparably effective practice
• significantly lesser adverse impact
• segregated housing patterns
• AI (artificial intelligence)
• substantial legitimate nondiscriminatory purposes
• no feasible alternative
• Minnesota Human Rights Act
• Minnesota Statutes 2024 section 363A.28 subdivision 10