If you’re an employer, you may already know that Minnesota is implementing a universal Paid Leave program for nearly all Minnesota workers. Paid Leave is going into effect January 1^st, 2026.

 

There is much to learn about the program, so be sure to check out the links to the official site.

 

We’ve collected some basic information to get you started.

 

You are responsible for submitting quarterly wage reports

 

Since October 31^st of 2024, you have been required to submit quarterly wage detail reports. If all of your employees are covered by Unemployment Insurance, no extra steps are needed from you.

 

The same system where you report for Unemployment Insurance is used to determine eligibility and benefits for Paid Leave.

 

If you are not required to submit quarterly wage detail reports for Unemployment Insurance for some or all of your employees, you should have created a new account in October of 2024 to report.

If you haven’t, you may be subject to late fees and administrative service fees.

 

You are required to educate your employees

 

Minnesota Paid Leave will provide written materials to you to assist you with informing and educating your employees about this new policy.

 

You are required to have informed your employees about Paid Leave by December 2025.

 

Premium amounts

 

Starting in 2026, Employers will be paying a 0.88% premium to fund Paid Leave.

 

Employers may choose to pay anywhere between half of the premium rate (0.44%) up to the full premium rate, and the remainder will be deducted from employee wages.

 

Employers must pay at least half of the premium rate.

 

Premium deductions may not cause an employee’s wages to be less than the minimum required wage, in which case the employers may be required to cover more than half of the premium.

 

Qualifying small employers will have a 50% reduced rate.

 

The premium rate will be set annually by July 31^st and will not exceed 1.2% per the Paid Leave law.

 

Premium rates will not be increased based on employees’ usage of the program.

 

The first premium payments for Paid Leave are due April 30^th, 2026, and will be based on the wage detail reported between January 1^st, 2026, and March 31^st, 2026. You can estimate your premium payments here.

 

Did you know?  Minnesota ranks the 4^th lowest in cost out of 14 similar State programs.

 

Benefits for Employees

 

Employees will receive payments from the state’s pool, funded by the premiums, when they take Medical or Family Leave.

 

Their jobs will be protected if they have worked at a job for at least 90 days.

 

Employee Eligibility 

 

Employees are eligible for Paid Leave if they work 50% or more of the year in Minnesota. If they work less than 50% of the year in Minnesota (ie, they split their work between other states), they are eligible if they live in Minnesota.

 

Taxes

 

Information about how the Minnesota Paid Leave program will affect taxes can be found here.

 

Equivalent Plans

 

If you already offer employees a type of Medical and Family paid leave, you can read about equivalent plan requirements here. If you provide one form of leave, but not the other, you will have to pay premiums for the other plan.

 

Switching to the State plan may offer cost savings to employers.

 

More Information

 

You can sign up for updates via email here.

 

You can see Frequently Asked Questions here.

 

Key Takeaways and Timeline: 

 

• Ensure you are submitting the required quarterly reports

• You are required to inform your employees by December 2025

• The Plan goes into effect January 1, 2026

• The first premium payments are due April 30^th, 2026

• Employees may not be terminated for using leave if they have held a job for more than 90 days

• Switching to the State Plan if you already offer an equivalent plan may result in cost savings

 

We are here for Minnesota business owners, offering guidance and helping to ensure compliance as the laws change. Stay tuned for other updates and be sure to reach out if you have any questions about your business!