Effective January 1, 2026, Minnesota’s new paid leave law will take effect, administered by the Minnesota Department of Employment and Economic Development’s Paid Leave Division. The program mandates paid time off for eligible employees, for qualified medical and family leave. In this article, we briefly explore Eligibility and Funding of the program, the Benefit Structure, and Employer Responsibilities.
Eligibility and Funding
Employees qualify for paid leave after earning at least 5.3% of the statewide average annual wage (about $3,600 in 2023) in the past year. A premium rate will be calculated annually for the following calendar year but will be capped and will not exceed 1.2% of taxable wages paid to each employee. The premium rate for the program’s first year, 2026, has now been set at 0.88% The premium rate is a percentage of an employee’s wages that will be collected by the state from employers. The premiums will be split between employees and their employers. There is now a calculator available to estimate costs for Minnesota employers and individuals. This tool gives an estimate of the premiums that will be due in 2026, after the program launches in January 2026. Access the calculator here: Premium Rate Calculator
Premium rates are set to ensure the Paid Leave program covers the cost of benefits and best serves its users. The Paid Leave premium rate of 0.88% for 2026 covers the premium for medical leave (0.61%), for your own medical care, and family leave (0.27%), to care for others.
Employers must pay at least 50% of the total premium and can deduct the remainder from employee pay. Employers may choose to pay up to 100% of the premium. Small employers pay a reduced premium rate. Small employers are 30 or fewer people and the average employee wage is less than 150% of the statewide average weekly wage.
After the first year in 2026, the premium rate will be set annually by July 31 for the following year and will be based on how the program is running, and best budgeting practices to keep the fund at a healthy level.
Benefit Structure
The program offers up to 12 weeks of leave for a single qualifying event and up to 20 weeks for multiple qualifying events within a year. Qualifying events include medical leave for pregnancy or recovery, family bonding, caregiving, support for family members in the military or for someone facing personal safety issues. The benefits of the program fall into two categories: Medical Leave and Family Leave. Employees are eligible for up to 12 weeks in each category per benefit year, with a total maximum of 20 weeks.
Employer Responsibilities
Covered organizations under the MN Unemployment Insurance (UI) Program will automatically have their accounts converted into joint UI/Paid Leave accounts. Those not covered by UI will need to register for a Paid Leave account through the UI online system as soon as possible, because the first wage reports were due on October 31, 2024. First quarterly premiums collected for paid leave will be due April 30, 2026. It is the responsibility of the employer to notify their employees about the new program by December 2025. Minnesota Paid Leave will provide written materials, workplace notice posters and other informational materials that employers can use to meet notification requirements.
For additional information regarding equivalent plans for paid leave, answers to FAQ’s, and to sign up to receive updates, please visit: https://paidleave.mn.gov/.