As regulatory activity continues to intensify in 2025, Lakeside HR Group is monitoring developments that affect Minnesota employers and offering strategic guidance to stay compliant and prepared. This quarter’s update covers key changes in employment law, workplace practices, and broader economic shifts that impact HR operations.

Minnesota HR Compliance Update

Paid Family and Medical Leave (PFML) Early Action Required

Minnesota’s new Paid Family and Medical Leave program goes into effect January 1, 2026. While implementation may still feel distant, preparation should begin now.

Updates:

  • State rulemaking is underway, with more clarity expected in the coming months.
  • Employers will soon be able to apply for private plan exemptions.
  • The 0.88% premium (shared by employers and employees unless otherwise covered) must be incorporated into payroll systems in early 2026.
Paid Family and Medical Leave Family Celebrating

Lakeside’s guidance:

Employers should begin modeling costs, updating internal leave policies, and coordinating with payroll and benefits providers. Organizations with existing paid leave programs should compare their offerings against the state’s forthcoming standards to determine compliance.

I-9 Updates Every Employer Needs to Know

USCIS has released a new version of Form I-9 (edition 01/20/2025). Lakeside recommends you review the expiration date on the I-9 version you are currently using to ensure your current document is still valid. The newest version must be in place by July 31st, 2026. [VG1]

Important Changes:

  • Updated terminology: Employees previously selecting “Noncitizen authorized to work” will now select “Alien authorized to work,” aligning with statutory language.
  • E-Verify updates: E-Verify has been updated to reflect this language change. Employers enrolled in E-Verify should ensure their teams select the correct option during case creation.
  • Extended work authorization grace period: DHS has permanently extended the automatic renewal period for expiring work permits (EADs) to up to 540 days, reducing the risk of employment gaps during timely-filed renewal processing.

Lakeside’s Guidance:

Employers should review current I-9 processes, ensure staff are trained on the form updates, verify E-Verify procedures are aligned, and proactively monitor work authorization expiration dates to maintain full compliance.

Earned Sick and Safe Time (ESST)

As enforcement of Minnesota’s ESST law ramps up, the state is focusing on whether employer PTO policies meet all 10 ESST compliance standards. Several violations have been noted across industries, including:

  • Absence of ESST accrual balances on pay stubs
  • Overly restrictive call-in procedures
  • Incomplete or unclear policy documentation

Lakeside’s guidance:

Employers using general PTO policies should ensure they meet the exact requirements of ESST or implement a dedicated sick leave policy. Employee handbooks and time-off request forms should be updated accordingly.

Pay Transparency: Enforcement Now Active

Minnesota’s pay transparency requirements are now being actively enforced. Investigators are focused on:

  • Job postings that lack salary ranges or benefit information
  • Inconsistencies between external postings and internal pay bands
  • Employers without a clear, documented compensation strategy
HR Staffing Recruiter Meeting

If you are using a recruiting agency and your organization meets the headcount threshold (25 or more employees), be aware that third-party postings must also comply with Minnesota’s pay transparency law. This includes having salary ranges and a general description of benefits in all job postings, whether posted directly by the employer or on their behalf.

Lakeside’s guidance:

Conduct a pay equity audit, update job descriptions and job ads across platforms (including those posted by recruiting partners), and ensure managers understand how to discuss compensation with transparency and confidence.

St. Paul Minimum Wage Increase (Effective July 1, 2025)

The next step in St. Paul’s minimum wage phase-in is approaching. Employers should prepare for the following increases:
New Minimum Wage for Micro and Small businesses (Effective July 1, 2025)

  • 1-5 employees: $13.25/hr
  • 6-100 employees: $15.00/hr

Employers must post a notice informing employees of their right to receive at least the applicable minimum wage, their ability to report violations, and that retaliation for asserting these rights is illegal.

Lakeside’s guidance:

Review internal pay scales and address compression where appropriate. HR teams should communicate proactively with managers to avoid confusion and prepare for payroll adjustments.

Minneapolis Expands Anti-Discrimination Ordinance

Effective August 1, 2025, the city of Minneapolis has broadened its Civil Rights Ordinance to include new protected classes and expand existing definitions. Employers are now prohibited from discriminating based on justice-impacted status, housing status, height, or weight. Additionally, the ordinance clarifies that race includes traits like natural hair and protective hairstyles and extends familial and disability protections.

Importantly, this ordinance applies to all employers operating within the city limits of Minneapolis, regardless of where the employee resides. Employers must also reasonably accommodate pregnancy-related conditions and religious practices unless it creates undue hardship. Now is the time to update your policies and training to reflect these expanded protections.

Lakeside’s guidance:

Before the August 1 effective date, employers with employees working in Minneapolis should review and update their anti-discrimination policies, job postings, and employee handbooks to ensure compliance with the new ordinance requirements.

Secure Choice Retirement Program

Minnesota’s state-run Secure Choice retirement program will begin enrollment in early 2026 for employers with five or more employees who do not offer a retirement plan. Organizations without a retirement plan should begin evaluating whether the Secure Choice program or a private plan alternative better meets their workforce needs. Internal education for employees will also be important as the rollout approaches.

Secure Choice Retirement Program

Lakeside’s guidance:

  • Keep an eye on official announcements regarding exact deadlines.
  • If you already offer a retirement plan, you may not need to participate.
  • If you don’t have a retirement plan in place, start considering how this change will affect your payroll and operations.

Stay Proactive, Stay Prepared

As legislation and enforcement continue to evolve, employers that prioritize compliance planning will be better positioned to adapt without disruption. Lakeside HR Group recommends a proactive approach to policy audits, workforce communication, and cross-functional planning.

For support with policy reviews, PFML preparation, wage strategy, or compliance audits, the Lakeside HR Consulting team is ready to assist.

About Lakeside HR Group

We are a premier HR Consulting and Recruiting firm connecting people and businesses through personalized, full-service solutions. As a boutique firm of seasoned HR professionals, we specialize in providing customized HR services for small to midsize businesses. With expertise across diverse industries, positions, and states throughout the U.S., we partner with our clients to discover top talent and deliver the support needed to help their businesses thrive.

Vintage Compass

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