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Minnesota Passes Paid Family and Medical Leave

Minnesota recently passed a paid family and medical leave law. Beginning January 1, 2026, employees will be eligible to take up to 20 weeks of paid family and medical leave per year.

Also beginning in 2026, employers and employees will begin to pay quarterly premiums based on the taxable wages of each employee into the state’s family and medical benefit insurance account.

Are all employees eligible to receive benefits?

The law defines a covered employee as one that has earned at least 5.3% of the state’s average annual wage rounded down to the next lower $100. For 2023, that is $3,500. Federal employees and seasonal employees are not eligible.

What are permitted reasons for leave?

Employees can take 12 weeks of paid leave per year for the following reasons:

    • Birth;
    • Adoption;
    • Foster care placement;
    • Employee’s serious health condition;
    • Caring for a family member with a serious health condition; and
    • Certain reasons related to the employee or employee’s family member experiencing domestic abuse, sexual assault, or stalking.

Family members are defined as any of the following:

    • Spouse or domestic partner;
    • Child, whether biological, adopted, foster, or step;
    • Parent or legal guardian;
    • Siblings;
    • Grandchildren;
    • Grandparents or spouse’s grandparents;
    • Son or daughter-in-law;
    • Any other relationship that creates an expectation of reliance, even if the employee and the individual do not live together.

If an employee experiences more than one reason for leave during a calendar year, they are limited to an aggregate of 20 total week of paid leave per year. Intermittent leave is permitted, however employers can limit that leave to 480 hours in a 12-month period.

Upon return, employees must be restored to the same position or an equivalent position with the same benefits, pay, and other employment conditions.

What if an employer already offers paid leave?

Employers offering private plans are exempt as long as their plan provides benefits and protections at least equal to those provided under the new law. The private plan must be approved by Minnesota’s new Family and Medical Benefit Insurance Division. Employers with approved private plans will not be required to pay tax premiums, but will be subject to an oversight fee.

How much are the premiums?

For employers without an approved private plan, quarterly premiums are 0.7% of the taxable wages paid to each employee. Employers must pay at least half of the annual premium. Employees will have the remainder of the cost of the premium deducted from their paycheck. Companies with less than 30 employees will pay a reduced amount that has yet to be announced.
Employers will also need to submit a quarterly wage report that includes employee wages and hours worked. Employee paychecks must also include information on any amounts that are deducted from or paid to employees, as applicable.

Are there notice requirements?

Notice requirements go into effect on November 1, 2025. Employers must post the applicable notice, which will be created by Minnesota’s Commissioner of Employment and Economic Development, in a clearly visible location. The notice must be in English and any other language spoken by at least five employees. Employers will also need to provide the same notice to all employees by December 2, 2025. New employees will need to be given notice within 30 days of hire.
Employers with approved private plans are also required to provide notice to their employees by these dates.

Although most of the law’s provisions do not take effect until 2026, employers of Minnesota residents are encouraged to prepare now by reviewing current paid leave offerings, employee handbooks, and payroll capabilities. If you have any questions about Minnesota's Paid Family and Medical Leave legislation, contact your OneDigital consultant.

For additional compliance news, check out our monthly compliance roundup here: What We’re Watching: Employer Compliance Across Benefits, HR, and Retirement.