Beginning on January 1, 2026, Minnesota’s new Paid Leave Law (PLL) will require nearly all employers to provide up to 20 weeks of paid family and medical leave through a new statewide program. The change introduces new payroll contributions, compliance obligations, and employee protections. Here is what Minnesota employers need to know about the PLL before the new year to be in the best position to avoid penalties and support their workforce when the law takes effect.
Who Is Impacted?
Almost every Minnesota employee is covered. The law applies to employers with one employee working in Minnesota, regardless of the size. In essence, the law applies to all employees who work in Minnesota, including part-time workers, but not independent contractors.
Seasonal employees who work in hospitality are also excluded from receiving benefits, depending on pay and days worked.
How Does It Work?
Starting January 1, 2026, both employers and employees contribute to the new state fund through payroll deductions. The total contribution will be 0.88% of wages, with the employer and employee splitting the amount and contributing evenly at 0.44% each. When a qualified employee takes leave, the state, not the employer, will pay a portion of their wages, up to $1,372.00 a week, for a cap of 20 weeks.
Do Employers Have to Use the State System?
No. Employers may apply for private or self-insured plans that provide the same level of benefits as the state program. These plans must be approved by the Minnesota Department of Labor and Industry. Employers that choose this option cannot charge employees more than the state premium rate.
If Employers Use the State System, What Do They Need to Do?
The Minnesota Department of Labor has provided a list of initial steps employers can take now to prepare for the January 2026 rollout. This includes registering for an Employer Account and designating a Paid Leave Administrator, who will be the main point of contact for the State of Minnesota. Additionally, all employers starting December 1, 2025, must post this poster in an area where employees can easily read and review the information contained.
Employers are required to submit quarterly wage detail reports, with the first due October 31, 2025. These reports determine the premiums paid by employers and employees. If your employees are already covered by Minnesota’s Unemployment Insurance (UI) system, Minnesota will use this account as a joint UI and Paid Leave account, with the quarterly wage details serving as information for both programs. If any employees are not covered by UI, employers will need to create a Paid Leave Only account through Minnesota’s Unemployment Insurance website.
How much an employer pays depends on the size of the workforce. Employers with 30 or fewer employees will pay a reduced premium rate of 75% of the annual premium rate.
For employers with 30 or more employees, it is recommended that you use this premium calculator to estimate your premium costs.
Adjustments to these rates will be made beginning July 31, 2026, and every year thereafter, so employers should check these rates every July to confirm accuracy.
Do You Still Need to Provide Sick and Safety Leave?
Yes. Minnesota’s new PLL is separate from the Minnesota Earned Sick and Safety Time (ESST) Law. Employers must continue providing ESST even if they participate in the PLL State Program.
Employee Job Protections – Proceed with Caution!
As with most laws in Minnesota, employers need to be cautious, as PLL includes strict reinstatement rights. Employers cannot retaliate or otherwise obstruct or interfere with an employee who requests or takes paid leave under PLL. Upon returning from paid leave (if the employee has worked for the employer for at least 90 days), the employee must be returned to the same position they held when their leave started, with equivalent benefits, pay, and other employment conditions. Additionally, the employer must continue providing all benefits, including health insurance, while the employee is on leave.
Questions? Our Team is Here to Assist You.
Your GRSM Minnesota team is here to help. Please contact us if you have questions about Minnesota’s new PLL or your compliance with any other employment laws. GRSM’s 50-state platform is uniquely designed to provide comprehensive legal coverage in every state, no matter your employer size or type of business.