Minnesota Passes Paid Family and Medical Leave: Effective in 2026
By: Danielle Smid
Paid Family and Medical Leave
On May 25, 2023, Minnesota Governor Tim Walz signed a Paid Family and Medical Leave bill (HF 2). The law provides employees with up to 20 weeks of paid family or medical leave per year. The leave program will be administered by a new division of the Minnesota Department of Employment and Economic Development: The Family and Medical Benefit Insurance Division. This law will apply to all employers regardless of their size and regardless of the number of employees located in Minnesota.
Under the law, employers will pay quarterly premiums to the Family and Medical Benefit Insurance state fund. These premiums will be calculated based on the amount of taxable wages the employer pays to their employees. As of January 1, 2026, the premium rates will be:
- 0.7% for an employer participating in both family and medical benefit programs;
- 0.4% for an employer participating in only medical benefit programs with an approved private plan for the family benefit program; and
- 0.3% for an employer participating in only the family benefit program with an approved private plan for the medical benefit program.
Employers may charge a maximum of half of their premium to their employees through a wage deduction.
Two Types of Leave Provided For
The law allows employees to take two types of paid leave: (1) leave for the employee’s own serious health condition; and (2) other leave, including family care, bonding, safety, or qualifying exigency.
An employee can take leave if they are experiencing a serious health condition themselves. A serious health condition is defined as a physical or mental illness, injury, impairment, condition, or substance use disorder that involves inpatient or outpatient care or continuing treatment or supervision by a health care provider involving various types of incapacity for a specified period of time.
Additionally, an employee can take “other leave” if needed. “Other leave” is broken into the following categories:
- Bonding leave – to bond with a biological, adoptive, or foster child in connection with the birth, adoption, or placement of the child. Bonding leave must be taken within 12 months of the birth, adoption, or placement of the child;
- Family Care leave – to care for a family member with a serious health condition or to care for a family member who is a military member;
- Safety leave – time off due to domestic abuse, sexual assault, or stalking of the employee or a family member to seek medical attention, victim services, counseling, relocation, or legal advice; or
- Qualifying Exigency leave – time off due to a military member’s active-duty service or notice of active duty.
Employee Rights and Benefits under the Law
An employee may take up to 12 weeks of paid leave for their own serious health condition and up to 12 weeks of paid leave for bonding, family care, safety, or a qualifying exigency. However, employees are limited to an aggregate of 20 weeks of paid leave in a benefit year.
An employee may take their leave intermittently (i.e., one day increments) for any of the covered reasons under the law, but the employer has the right to limit intermittent use of leave to 480 hours in any 12-month period. The employee can then take any remaining leave continuously.
When an employee takes leave under the law, they will not receive benefits equivalent to their full wages. Instead, the state will apply a maximum weekly benefit amount, to be computed as set forth in the statute. Benefits will be paid to the employee weekly. The weekly benefit amount will be prorated when: (a) the employee works hours for wages, (b) the employee uses paid sick leave, paid vacation, or other paid time off, or (c) the leave is taken intermittently.
To obtain benefits, an eligible employee must file an application for benefits and establish a benefit account with the new Division. Benefits will be paid from the Family and Medical Benefit Insurance state fund. Additionally, an employee must provide at least 20 days’ advance notice to the employer if the need for leave is foreseeable. If the need for leave is not foreseeable, the employee must provide notice as soon as is practicable.
Finally, the statute prohibits retaliation against employees for seeking, requesting, or obtaining leave benefits. It also prohibits employers from obstructing or impeding an application for leave or benefits. The employer must maintain insurance under any group policy or health care plan for an employee on leave and must continue to pay the employees share of such benefits. Upon return from leave, an employee must be reinstated to the same position the employee held when the leave started or to an equivalent position with equivalent pay, benefits, terms, and conditions of employment.
A previously discussed, employers will begin to pay premiums into the state fund in January 2026. However, instead of participating in this public plan, employers may opt to offer a private plan, as long as the private plan provides benefits and protection that are the same or greater than those offered under the public plan. Additionally, the private plan must be approved by the Family and Medical Benefit Insurance Division.
Employers have several upcoming and important responsibilities under the Paid Family and Medical Leave program:
- Starting in mid-2024, most Minnesota employers will be required to submit a wage detail report, which will detail the quarterly wages received and hours worked for each employee.
- Starting in late 2025, employers must notify their employees about the program. The Paid Family and Medical Leave program will provide language for this notification.
- Starting in January 2026, employers will also be required to submit any premium payments due.
Additionally, in preparation for January 2026, Minnesota employers should consider taking the following actions:
- Determine whether you will be participating in the statewide public plan or will be seeking private plan approval from the Division;
- Review all employee handbooks and company policies to comport with the law (this includes considering how your current FMLA policies will be affected); and
- Internally prepare for additional payroll taxes and changes to any necessary infrastructure that will be used to support the law’s requirements.
If you have any questions about your business or your employees, please contact me or your BrownWinick Employment & Labor attorney. We are here to offer trusted legal advice and add value to any matter, including those with complex and novel issues. Special thanks to summer associate Rebecca Coleman for her assistance with this blog.