Employer Alert: Minnesota’s New Paid Family and Medical Leave Law Requires Employer Action as Early as 2024
This year, the Minnesota legislature adopted a new law to create state Paid Family and Medical Leave (“PFML”). Specifically, the law provides employees with partial wage replacement for a minimum of twelve weeks (up to twenty weeks) of leave in a fifty-two week period for medical leave, bonding with a new child, caring for a family member, safety leave, or qualifying exigency leave. The new law goes into effect on January 1, 2026, however, employers have obligations that begin in 2024.
Who is a covered employer?
The new PFML law applies to all Minnesota employers, regardless of size and number of employees.
Who is a covered employee?
All Minnesota employees, with limited exceptions, are eligible for PFML if they meet certain financial requirements. Specifically, an employee must have earned at least 5.3% of the state average wage over their “based period” (which is defined as the most recent four completed calendar quarters before the employee’s application for benefits). The employee can aggregate wages earned from multiple employers to meet this requirement.
There are four exceptions—independent contractors, self-employed individuals, federal employees, and seasonal employees.
What are the eligible reasons for using Paid Family and Medical Leave?
Employees may use PFML for any of the following reasons:
- Medical leave to address an employee’s own serious health condition.
- Caregiving leave to allow an employee to care for a family member with a serious health condition or to care for a family member who is a member of the military.
- Parental leave to allow an employee time to bond with a new child. Employees must take this leave within twelve months of the birth, adoption, or placement of the child, except when the child must remain in the hospital longer than the birthing parent, in which case the leave must end within twelve months after the child leaves the hospital.
- Safety leave for an employee and their family members dealing with domestic abuse, sexual assault, or stalking to seek medical attention, victim services, counseling, relocation, or legal advice.
- Deployment-related leave for an employee due to a military member’s active-duty or notice of active duty, including care for the family member’s child, making financial or legal arrangements, attending counseling, attending military events, spending time with the family member during a rest and recuperation leave or following return from deployment, or making arrangements after the death of a military member.
What will be the cost of premiums?
Premiums will be 0.7% of an employee’s taxable wages. Employers may charge a maximum of half of this premium (or 0.35%) to employees through wage deduction.
When are employees entitled to Paid Family and Medical Leave?
Employers must provide leave to employees after ninety days of employment. Employees are entitled to continued health insurance during their leave and reinstatement after the conclusion of their leave. The new law includes protections against discrimination, retaliation, and interference with PFML. Penalties range from $1,000 to $10,000 per violation and employees can pursue court actions with remedies, including double damages plus attorneys’ fees.
How much Paid Family and Medical Leave is available to employees?
The maximum length of benefits is twenty weeks per year. An employee can receive a maximum of twelve weeks of paid leave for a serious health condition, or twelve weeks of paid leave for any other type of leave (i.e., family care, bonding, safety, and qualifying exigencies), but benefits max out at twenty weeks per year.
How much are employees paid while on Paid Family and Medical Leave?
Employees will not receive their full wages while taking PFML. The state will apply a maximum weekly benefit amount that is computed by statute. Specifically, an employee’s weekly benefit will be calculated by applying the following percentage to the employee’s average typical workweek and weekly wage during the high quarter of their base period:
- 90% of wages that do not exceed 50% of the state’s average weekly wage; plus
- 66% of wages that exceed 50% but are less than 100% of the state’s average weekly wage; plus
- 55% of wages that exceed 100% of the state’s average weekly wage.
What should employers do to prepare?
While the new PFML law does not go into effect until January 1, 2026, there are statutory obligations that employers must meet prior to this date.
Beginning in July 1, 2024, employers are required to submit to DEED quarterly wage detail reports. These reports must include the names of employees, the total wages paid to each employee, and the total number of hours worked for each employee, among other requirements.
Beginning November 1, 2025, employers must post notices in a form created by the state relating to PFML. Employers are also required to issue a notice to new employees upon hire, and thirty days before premium collection begins for others who did not receive notice upon hiring.
Beginning January 1, 2026, employers must begin submitting premium payments to the state through an employer account system. On this date, employers must also include on employee earning statements the amount paid by the employer and the amount deducted from the employee’s wages for PFML.
Legal consultation is advised for specific questions and scenarios, ensuring effective and compliant navigation through these transitions. Parker Daniels Kibort has one of the top labor and employment practices in the State of Minnesota. For more information on this topic or for help with related inquires, contact the Parker Daniels Kibort labor and employment team at 612.355.4100.
