On May 25, 2023, Governor Walz signed Minnesota’s Paid Family and Medical Leave bill into law. Minnesota will join 11 other states and Washington D.C. with paid leave laws. Eligible workers will be able to begin receiving benefits on January 1, 2026, and employers will begin contributing to the program on the same date.
The law creates a family and medical benefit insurance program administered by the Minnesota Departmentof Employment and Economic Development (DEED) – Family and Medical Benefits Division. Similar to Minnesota’s unemployment insurance benefits program, DEED will maintain a premium account for each employer and an employee will apply for their qualified family or medical leave through DEED. DEED will then determine the applicant’s eligibility and the amount of benefit available to the employee.
However, an employer can apply to DEED for use of an alternative private plan that provides paid family or paid medical benefits. The private plans must meet the state requirements and are subject to approval by DEED.
Eligibility Requirements and Benefit Amounts
The law broadly covers private sector, state and local government employees regardless of employer size. This includes full-time and part-time employees, and contains limited exceptions for self-employed individuals, independent contractors, and seasonal employees. A seasonal employee is defined as an individual employed in hospitality for no more than 150 days during any consecutive 52-week period.
An application for benefits may be filed up to 60 days before the leave is taken. The statute provides that an applicant is eligible to receive benefits if: (1) the requested leave time is in the applicant’s benefit year; (2) the applicant was unable to perform regular work due to one of the six reasons listed below; (3) the applicant has at least 5.3 percent of the state’s average annual wage; and (4) the applicant has fulfilled the certification requirements.
Benefits will be available to employees who are unable to perform their work due to one of the following reasons:
- A serious health condition of the employee or their family member
- Safety leave
- To provide family care
- Bonding leave
- Pregnancy or recovery from pregnancy
- A qualifying exigency arising from military service
Maximum benefits will be calculated by applying a formula to an employee’s average work week and weekly wage during the base period with the highest number of wages. Benefits will be paid weekly. In a single benefit year, the total number of weeks an employee may take for medical leave or family leave is the lesser of 12 weeks or 12 weeks minus the number of weeks within the same benefit year that the employee received benefits for the other category of leave, plus eight weeks. This means that an employee may take up to 20 weeks of paid leave within a single benefit year.
For example, if an applicant took 12 weeks of leave to bond with a new child, they are still eligible for eight weeks of paid medical leave in that same benefit year.
No benefits are paid for the portion of any week in which the employee receives vacation pay, sick pay, paid time off, workers compensation benefits or disability insurance benefits (paid in whole or in part by the employer). An applicant may also take the leave intermittently.
Relationship with Other Laws
Minnesota’s Paid Family and Medical Leave law does not repeal Minnesota’s Pregnancy and Parenting Leave statute or the FMLA. Rather, an employer may require leave taken under the Paid Family and Medical Leave program to run concurrently with leave taken for the same purposes under Minnesota Statute section 181.941 (Minnesota Pregnancy and Parenting Leave) or the FMLA. Similarly, the length of leave available under the Minnesota Pregnancy and Parental leave may be reduced by paid parental, medical or sick leave so that the total leave does not exceed 12 weeks unless agreed to by the employer. It is possible that an employee is eligible for Minnesota’s Paid Family and Medical Leave but does not qualify for leave under the FLSA.
Employer premium rates beginning January 1, 2026, will be as follows:
- For employers participating in both family and medical benefit programs – 0.7%
- For an employer participating in only the medical benefit program and with an approved private plan for the family benefit program – 0.4%
- For an employer participating in only the family benefit program with an approved private plan for the medical benefit program – 0.3%
Account premiums will be paid quarterly on taxable wages paid to employees. Beginning January 1, 2027, annual premium rates will be adjusted based on the formula detailed in the statute.
The law also includes an employee charge back. This requires that employers pay a minimum of 50% of the annual premiums and employees pay the remaining portion, if any, of premiums not paid by the employer.
The law also includes notice requirements for both the employee and the employer. For the employee, if the leave is foreseeable, an employee must provide at least 30 days’ advance notice before leave is to begin. Otherwise, notice must be given as soon as practicable. An employee must provide verbal or written notice sufficient to make the employer aware that the employee needs leave and the anticipated timing and duration of leave. However, an employer may require that an employee comply with its usual notice and procedural requirements for requesting leave, unless unusual circumstances cause the reason for the employee’s need for leave.
An employer must post in a conspicuous place on each of its premises, a workplace notice prepared by the commissioner describing the family and medical leave benefits. The notice must be in English and each language other than English which is the primary language of five or more employees or independent contractors of that workplace if such notice is available from DEED.
Additionally, an employer must issue the following information to its employees within 30 days from the beginning date of each employee’s employment, or 30 days before premium collection begins, whichever is later:
- An explanation of the availability of family and medical leave benefits provided under the statute;
- The amount of premium deductions made by the employer;
- The employer’s premium amount and obligations;
- The name and mailing address of the employer;
- The identification number assigned to the employer;
- Instructions on how to file a claim for family and medical leave benefits;
- The mailing address, email address, and telephone number of the department; and
- Any other information required by the department.
The employer must obtain the employee’s written or electronic acknowledgement of receipt of the information.
In conclusion, employers should be proactive in bringing their policies into compliance with the new Minnesota Paid Family and Medical Leave law. The law provides employers a small grace period until January 1, 2026. Our labor and employment attorneys at Larkin Hoffman will continue to monitor any changes to legislation and keep our readers updated as the landscape develops.