The Minnesota Paid Leave Law goes into effect on Jan. 1, 2026. The law makes an already complex family and medical leave landscape more complicated. The law applies, with few exceptions, to all employers regardless of size and to all employees regardless of the length of their employment. This differs from the requirements of the federal Family and Medical Leave Act (FMLA), which applies only to larger employers and to employees who have at least one year of service. Some important highlights of the new law:
- The law allows employees to apply for partially paid leave through a state program administered by the Minnesota Department of Employment and Economic Development (DEED). The program will be paid for through an additional payroll tax applicable to all covered employees. That tax is set at 0.88% of an employer’s payroll for 2026, and the law allows employers to charge up to one-half of that amount to employees as a withholding.
- Employers may opt out of the state paid leave program by providing their own program, or by purchasing an insurance plan, that provides the same or better benefits as the state program. We expect details on the opt-out process to be published by DEED very soon. Employers who opt out of the state plan will not be charged the 0.88% tax, but will still be required to approve employee leave requests that fall within the Paid Leave Law and to avoid interference or retaliation against employees taking leave.
- The Paid Leave Law also provides for leave for a broader set of circumstances than required under existing laws. For example, employees may take paid leave for safety reasons, generally defined as leave required because an employee, or their family member, has been affected by domestic abuse, sexual assault, or stalking.
- The law defines “family member” more broadly than the FMLA, and allows employees to take leave to care for stepchildren, siblings, grandchildren, grandparents, in-laws, and other individuals—even non-family—who rely on an employee for care.
- The law provides for up to 12 weeks of paid leave per year. But under some circumstances, including when an employee has a need for both medical leave and family leave within the same benefit year, the employee may qualify for more than 12 total weeks of leave.
Employers have significant choices to make in the next six months, as well as notice obligations beginning at the end of 2025. Best & Flanagan’s Employment Law team stands ready to assist employers with reviewing policies, making decisions about opting out of or supplementing benefits under the state plan, and ensuring that your organization understands its compliance obligations under this new law.
