Minnesota Paid Leave: What Employers Need to Know Before 2026

Minnesota has enacted a statewide Paid Leave program that combines paid family leave and paid medical leave, bringing major changes to payroll, HR administration, and reporting. Although benefits won’t begin until January 1, 2026, employer responsibilities have already started. Now is the time to prepare so your team, systems, and processes are ready. Below is a clear overview of the program and the key steps Minnesota employers should take today.

Overview of Minnesota’s Paid Leave Program

Beginning in 2026, eligible Minnesota workers may take paid leave for:

• Their own serious health condition
• Bonding with a child
• Family caregiving
• Safety leave (domestic violence, stalking, or sexual assault)
• Military-related events

The program will be administered by the Minnesota Department of Employment and Economic Development (DEED) and funded through payroll premiums paid by both employers and employees.

Payroll Premiums Begin January 1, 2026

Employers must begin collecting and remitting premiums starting in 2026. Key details include:

Premium Rate

• Initial premium rate: 0.88% of taxable wages, split 50/50 between the employer and employee.
• The taxable wage limit follows the Social Security wage base.
• Employee premiums are after-tax.
• Employers may choose to cover the employee share. If they do, that amount must be included in taxable income and reported on Form W-2, Box 14.

How Premiums Are Remitted

Premiums will be paid through the Minnesota Unemployment Insurance website, using the same wage information submitted for unemployment reporting.

Small Business Premium Rate

Employers with fewer than 30 employees, and with average weekly wages under 150% of the statewide average, may qualify for a reduced employer premium. The employee share must still be withheld unless the employer voluntarily covers it.

Employee Notice Requirements

Employers must distribute a written notice and display a workplace poster no later than December 1, 2025.

Private Plan Option

Employers can apply to use a private paid leave plan instead of the state program. Requirements include:

• Benefits must match or exceed the state plan.
• Plans must be approved by DEED each year.
• Plans may be insured or self-funded.

Job Protection Rules

Minnesota Paid Leave includes job protection. Eligible employees must generally be returned to the same or an equivalent position after leave.

Recommended Next Steps for Employers

To stay compliant and avoid surprises, Minnesota employers should begin planning now:

1. Confirm your employer/employee premium split. Employees cannot pay more than 50% of the premium.
2. Determine whether you will supplement state benefits. Employees may choose, but cannot be required, to use PTO, vacation, or sick leave.
3. Designate your Paid Leave Administrator on the Minnesota Unemployment Insurance website.
4. Review and update your employee handbook to align policies with the new law.
5. Establish a clear internal notification process for employees who need leave.
6. Monitor DEED updates at https://pl.mn.gov/ and sign up for email alerts to stay ahead of changes.

Redpath: Your Trusted Guide

As Minnesota’s Paid Leave program continues to take shape, having a trusted partner to guide you through the details can make all the difference. 

If you have questions about how these requirements apply to your organization, need help updating policies, or want support preparing your payroll and HR processes, our team at Redpath is here to help. We’ll bring clarity to the complexity, walk you through your next steps, and make sure you’re ready well before the 2026 deadlines.

Email us today to start a conversation or get answers to all your questions.