A new program impacting Minnesota employers called Paid Leave launches in January 2026.
The program offers financial benefits to employees facing qualifying life events, requiring contributions from both employers and workers. This initiative aims to provide stability for employees during challenging times, potentially leading to a more engaged and productive workforce.
What Does Paid Leave Cover?
Paid Leave offers partial wage replacement benefits to eligible Minnesota employees. The program emphasizes accessibility, ensuring financial support reaches those most in need.
Specific dollar amounts are still under consideration. The Minnesota Department of Employment and Economic Development will determine wage replacement percentages and the minimum qualifying income for benefits closer to the launch date.
The program offers two main leave categories: family leave and medical leave. Each category allows employees to take a maximum of 12 weeks per benefit year (the 12-month period starting when the employee first uses Paid Leave). However, employees cannot exceed a total of 20 weeks of leave within a single benefit year if they utilize both categories.
Family Leave:
This covers situations where an employee needs time to care for a sick family member, including a spouse, child, parent, sibling, grandparent, or grandchild. It also applies to bonding with a new child through birth, adoption, or foster care placement.
Medical Leave:
Employees facing a serious health condition that prevents them from fulfilling their work duties can utilize medical leave. This includes recovery from surgery, chronic illness management, or treatment for mental health conditions.
Key Dates for Employers:
- October 31, 2024: First quarterly wage reports due (based on wages from July 1 – September 30, 2024)
- December 2025: Deadline to notify employees about Paid Leave benefits
- January 1, 2026: Payroll deductions for employers and employees begin
- April 2026: First quarterly premium payments due from employers
How Does This Affect Your Business?
Most Minnesota employers with one or more employees are required to participate, with some exceptions (federal government employees and self-employed individuals). Employers will contribute a portion of payroll towards the program alongside employee deductions via unemployment insurance.
Nextep PEO clients
If you’re on one of Nextep’s medical plans, we’ve already got you covered! For our Minnesota clients on Nextep plans, we’re registering your account with the Paid Leave program and remitting payments to the state authorities.
If your company is on its own plan and would like to file for an exemption, please notify Nextep once you’ve filed and been approved.
For more information and frequently asked questions, employers can visit Minnesota’s Paid Leave resources page. You can also check out their FAQ resource.
