Minnesota Paid Family and Medical Leave Update

A Quick Refresher on Minnesota Paid Leave

Statewide Paid Leave Program

Minnesota will be the 13th state to launch a statewide paid leave program, which will be administered by the state. Funding will come from a combination of payroll tax contributions made by both employers and employees.

Leave Entitlement

Nearly all Minnesota employers, regardless of revenue or headcount, will be required to offer 12 weeks of paid medical leave and 12 weeks of paid family leave, with a maximum of 20 weeks combined leave in a 52-week period. Independent contractors and self-employed individuals may also opt into the program.

Pre-Funding

The program will be pre-funded by the state using surplus funds ahead of 2026. Starting in January 2026, it will be funded by payroll taxes, which can be shared between employers and employees. Employers not covered under the “small employer” provisions or grants must cover at least 50% of the payroll tax.

Leave Applications

Eligible employees may begin applying for paid leave through the state in January 2026. Depending on the qualifying condition, leave can be taken in a single block (continuous leave) or in smaller increments (intermittent leave).

Types of Paid Leave

• Family Leave: For caring for a family member with a serious health condition, bonding with a new child, supporting a family member called to active duty, or assisting a family member facing a significant personal safety issue.
• Medical Leave: For an employee’s own serious health condition that prevents them from working.

Recent Updates to Minnesota Paid Leave

Wage Reporting

The Paid Leave program has partnered with Unemployment Insurance (UI) to use its online portal for collecting wage detail reports starting October 2024.

Payroll Tax Adjustment

During the 2024 legislative session, the payroll tax was increased from the originally stated 0.7% to 0.88% to ensure program solvency and cover costs. The cap on future increases remains unchanged at 1.2%.

Small Employer Provisions

• Small employers (30 or fewer employees) with an average wage below 150% of the state’s average wage can apply for assistance grants.
• Small employers qualify for a “small employer premium rate” of 75% of the annual Paid Family and Medical Leave (PFML) premium rate.
• Employers must pay at least 25% of the premium and cannot deduct the employer portion from employee pay. Employees are responsible for any remaining portion not covered by the employer through a payroll tax.
• These provisions take effect on January 1, 2026.

Considerations for Employers in Minnesota

Private Plans

Employers already offering paid leave programs should review them for alignment with state requirements. Additional guidance is expected from the state in the coming months.

Unemployment Insurance Accounts

Employers whose employees are not covered by the Unemployment Insurance program will need to set up a “Paid Leave Only” account through the UI online system.

Opt-In for Independent Contractors

Self-employed individuals and independent contractors wishing to participate in the program can create a “Paid Leave Only” account.

Stay Informed

Employers are encouraged to sign up for paid leave updates through the state’s website.