Paid Leave Legislative Changes in 2024

OCTOBER 31, 2024 WAGE REPORT DEADLINE FOR NEW MINNESOTA PAID LEAVE PROGRAM
(Yes, this applies to churches and religious organizations!)

Paid Leave is a new statewide program that will begin in 2026. Paid Leave will provide partial wage replacement (55% to 90% of weekly wages) and job protection when a serious health condition prevents employees from working, when employees need time to care for a family member or a new child, for certain military-related events or for certain personal safety issues.

TYPES OF LEAVE. There are two main types of leave:

Family Leave to care for a family member with a serious health condition, or if an employee is bonding with a new baby or child in your family. (Maximum of 12 weeks in a benefit year)
Medical Leave when an employee’s own serious health condition prevents the employee from working. (Maximum of 12 weeks in a benefit year)

Additionally, employees will be able to take leave to support a family member called to active duty, or if an employee or a family member are facing a significant personal safety issue.

No more than 20 weeks of Paid Leave can be taken in a benefit year.

ADMINISTRATION AND PAYMENT OF LEAVE BENEFIT TO EMPLOYEES. The Paid Leave program will be administered by the Minnesota Department of Employment and Economic Development. A covered employee will be paid a benefit by the State, following submission of an application and verification of eligibility.

EMPLOYERS COVERED. Paid Leave covers most Minnesota employers with one or more employees who have earned at least 5.3% of the statewide average annual wage in the past year (about $3,600 in 2023), with exceptions for employees of tribal nations or the federal government and self-employed individuals who choose to provide their own coverage. Small businesses with 30 or fewer employees will be eligible for reduced premiums and may be eligible for small business assistance funding to hire temporary workers or to increase an existing worker’s wages.

EMPLOYER OBLIGATIONS/TIMELINE:

October 2024. To determine eligibility and benefit payments for Minnesota employees when Paid Leave launches in January 2026, Minnesota employers must report wage details for their employees starting October 31, 2024. Paid Leave will use the same online reporting system as Minnesota Unemployment Insurance (UI. No additional steps are needed from Minnesota employers if all employees are covered by UI, as the same account and quarterly wage detail reports will serve Paid Leave. Employers that have some or all employees not covered by UI may need to create an account to submit wage details by October 31, 2024, reporting wages paid to employees between July 1, 2024, and September 30, 2024.
By December 2025. Employers must inform employees about their rights and benefits under this new program. The State will provide written materials, workplace notice posters, and other informational materials that employers can use to meet their requirements.
January 1, 2026. Employers start deducting Paid Leave premiums from employee paychecks, if applicable.
April 30, 2026. First premium payments for Paid Leave paid to State (based on wage details reported between January 1, 2026 and March 31, 2026). Paid quarterly thereafter.

FUNDING OF PAID LEAVE. Paid Leave is funded by premiums collected by the State from employers. The premium rate for the program’s first year (2026) has not yet been set (premiums estimates of about .9% of an employee’s taxable wages have been discussed). The premium rate will be set each year, subject to a maximum set in state law, based on how the program is running and best budgeting practices to keep the fund at a healthy level. Beginning in 2026, employers will submit quarterly Paid Leave premium payments through their Unemployment Insurance account for Paid Leave. Employers may split the cost of Paid Leave premiums with employees. Employers must pay at least 50 percent of the total premium, though they may choose to pay up to 100 percent of the premium.

Employers who are otherwise required to participate in Paid Leave may seek an exemption from the Paid Leave law by applying for a private plan exemption beginning in 2025. Employers must offer a private plan with at least the same rights, protections, and benefits provided to employees under the Paid Leave law. To be considered for a private plan exemption, the employer will need to submit documentation showing proof of coverage and that the plan fully meets the requirements laid out under the Paid leave law.

PLEASE NOTE. Minnesota Paid Leave is different than and does not replace federal or state FMLA Leave, Minnesota Parenting Leave, and state or city Earned Sick and Safe Time programs.

Link to comparison document between State Earned Sick and Safe Time and Paid Leave program: https://mn.gov/deed/assets/paid-leave-comparison-acc_tcm1045-611627.pdf

Link to Paid Leave Employer Resource Toolkit: https://mn.gov/deed/paidleave/employers/resource/

Link to Paid Leave Employer FAQS https://mn.gov/deed/paidleave/employers/faq/