Minnesota Paid Leave Program: What Covered Businesses Should Know

The Minnesota Paid Family and Medical Leave (MN PFML) program will offer job-protected, wage-replacement leave beginning Jan. 1, 2026, to eligible employees for qualifying reasons lasting at least seven days, including when they are unable to work because of their own serious health condition or because they are providing care for a covered family member. Eligible employees will be able to take paid family leave and paid medical leave in Minnesota.

Who Is Eligible for Minnesota Paid Family and Medical Leave?

An eligible employee is a full-time or part-time worker employed by a covered employer, which includes private-sector businesses of any size, as well as state and local governments. Self-employed individuals can opt-in to the program, too.

Individuals must also earn at least 5.3% of the state average annual wage (SAAW) during the base period, which is the 12-month period prior to taking leave. This is a portable benefit, so changing jobs between covered employers does not jeopardize an eligible employee’s earned income amount because it carries over.

What Are Qualified Reasons for Taking MN PFML?

The law that created the Minnesota Paid Family and Medical Leave program offers medical leave, parental leave, safety leave, caregiving leave, and leave related to military deployment. The following are qualified reasons for taking leave:

• Caring for one’s own serious health condition^, which includes pregnancy (medical)
• Bonding with a new child from birth, adoption, or foster care placement within the first 12 months (parental)
• Caring for a family member* with a serious health condition (caregiving)
• Dealing with issues arising from a family member’s deployment in the military (deployment related)
• Addressing needs of a victim of sexual or domestic violence (safety)

^-A serious health condition is described as illness, injury, physical and mental condition that results in impairment, in-patient hospital or hospice care, or continuing treatment under the care of a doctor or medical practitioner.

*-Under Minnesota’s paid leave law, the definition of family member includes, but is not limited to, a spouse or domestic partner, a child (e.g., biological, adopted, foster, stepchild), parent, sibling, grandchild, grandparent, an individual whose relationship with the eligible employee creates an expectation of care from that individual.

What Are the Benefits Under Minnesota PFML?

Eligible employees can take a maximum of 12 weeks of medical leave, a maximum of 12 weeks of family leave, or a combination of both leaves. However, if both leaves are taken in a 12-month period, the employee can only take a total of 20 weeks.

The wage replacement rates are progressive, which means lower-income workers taking leave will receive a higher percentage of their income. The scale is as follows for workers:

• 90% of the portion of their weekly wages that is less than or equal to 50% of the state average weekly wage (SAWW); plus
• 66% of the portion of their weekly wage that is more than 50% of the state weekly wage but less than or equal to 100% of the statewide average weekly wage; plus
• 55% of the portion of their weekly wages that is more than 100% of the state average weekly wage

The SAWW, effective Oct. 1, 2024, is $1,372. The maximum weekly benefit in 2025 is $1,481.76.

How is MN Paid Family and Medical Leave Funded?

The state appropriated funds from Minnesota’s general fund to start building the program’s insurance fund. Beginning Jan. 1, 2026, employers and employees will evenly split funding the program through payroll premiums. The premium rate will be 0.7% of employee’s wages, with the employer and employee each paying 0.35%. Starting Jan. 1, 2027, the annual premium rate must be adjusted based on the previous year’s disbursements, but that rate cannot exceed 1.2% of taxable wages paid to each employee.

If a business has fewer than 30 employees, an employer will pay a reduced rate. However, employees at small and large employers will pay the same rate.

Contributions to the program begin Jan. 1, 2026, with the deadline for employers to remit the first premiums to Minnesota’s Department of Employment and Economic Development (DEED) due April 30, 2026.

Are There Reporting Requirements Under MN PFML?

Covered employers must submit wage detail reports on a quarterly basis, which enables the state to determine premiums paid by employers and employees, as well as an eligible individual’s benefit amount.

Employers also have notification requirements, which include providing written information to employees within 30 days of their start date that gives details about leave availability, premium deduction amounts, and how to file a claim. Notices need to be provided in the employee’s primary language and delivered as a document or on a poster in a conspicuous place at work (e.g., a break room).

Is There a Private Plan Exemption to MN PFML?

A business or employer can opt out of the state-run Minnesota Paid Family and Medical Leave program if they self-insure or provide a fully insured private plan that provides benefits equal to or exceeding those of the state plan. Businesses can begin opting out of the state plan starting July 1, 2025, but employers must get approval from the state for any self-insured or private plan.

Looking Forward

Businesses in Minnesota enrolled in the state’s paid family and medical leave program might also be looking to offer other benefits that could enhance their employee recruitment and retention programs. Paychex also provides HR Services to help businesses.

Additional Resources

• Minnesota Paid Leave website