Minnesota is poised to become the 13th state in the U.S. to launch a mandatory statewide paid leave program. Signed into law in 2023 and refined through 2024 amendments, the Minnesota Paid Leave program ensures that workers no longer have to choose between their paycheck and their health or family responsibilities. Starting January 1, 2026, the state will begin providing partial wage replacement and job protections for employees facing qualifying life events, such as serious medical conditions or welcoming a new child.
Details of the Minnesota Paid Leave Law
The program is administered by a new Paid Leave Division within the Department of Employment and Economic Development (DEED). Unlike many federal protections, this state-level mandate applies to nearly every employer in Minnesota, even those with only one employee.
Qualifying Reasons for Leave
Workers can apply for paid benefits for several specific reasons:
- Medical Leave: To care for one’s own serious health condition, including pregnancy, childbirth, and surgery.
- Bonding Leave: To bond with a new biological, adopted, or foster child within the first year.
- Family Care: To care for a family member with a serious health condition.
- Safety Leave: To seek assistance related to domestic violence, sexual assault, or stalking.
- Military Exigency: To support a family member on active military duty.
Funding and Premiums
For 2026, the initial premium rate is set at 0.88% of taxable wages, capped at the Social Security (OASDI) limit. Employers must contribute at least 50% of this premium (0.44%), while the remaining 50% can be deducted from employee wages. Small employers (30 or fewer employees) may qualify for a reduced premium rate of 0.66%.
What this means for skilled workers
For the Minnesota workforce, this law provides a significant social safety net. Eligible workers — those who have earned at least $3,900 in the state over the past year — can receive weekly benefits ranging from 55% to 90% of their regular wages, depending on their income level.
Crucially, the law provides job protection after 90 days of employment, meaning workers are entitled to return to their original or an equivalent position after their leave. Benefits are also “portable”; if an employee changes jobs within Minnesota, their earnings from previous covered employers still count toward their eligibility.
What it means for employers
Minnesota employers face a complex transition period throughout 2025. By December 1, 2025, all employers must have notified their employees of their rights under the new law and displayed required workplace posters.
Employers must also decide whether to participate in the state-run plan or apply for and equivalent private plan. While private plans offer flexibility, they must be approved by the state and provide benefits equal to or better than the state program. Additionally, employers must manage the “coordination of benefits,” determining how state paid leave interacts with existing PTO, short-term disability, and FMLA policies.
How Multiplier can help: Managing these localized state mandates is a significant administrative burden, especially for businesses with distributed teams. As an Employer of Record (EOR), Multiplier can:
- Handle Compliance: We ensure all state-specific tax withholdings and premium contributions are handled accurately and on time.
- Manage Notifications: We take care of the legal requirement to provide individualized notices and obtain acknowledgments from your Minnesota-based staff.
- Simplify Payroll: Our platform consolidates multi-state and multi-country payroll, so you don’t have to navigate different state portals for every new law.
Ensuring workforce compliance amid paid leave shifts
The Minnesota Paid Leave law represents a major shift in the state’s employment landscape, offering one of the most robust benefit packages in the United States. While it provides workers with unprecedented security, it demands rigorous administrative preparation from businesses. Whether you are navigating EOR needs for full-time staff, Contractor of Record compliance for contractors, or searching for a unified Global Payroll solution, Multiplier is ready to help you scale your team in Minnesota and beyond without the legal headache.
FAQs
When does the Minnesota Paid Leave program officially begin?
The program takes effect on January 1, 2026. On this date, eligible employees can begin applying for benefits, and employers must start deducting the employee share of premiums from wages.
How much leave can an employee take under the Minnesota Paid Leave law?
Employees are entitled to up to 12 weeks of medical leave (for their own serious health condition) and up to 12 weeks of family leave (for bonding, caregiving, or safety reasons) per year. However, the total combined leave an individual can take in a single benefit year is capped at 20 weeks.
Which employers are required to participate in the Minnesota Paid Leave program?
Nearly all employers with at least one employee working in Minnesota are covered by the law. This includes private sector businesses, non-profits, and state and local government entities, regardless of the total number of employees they have.
How is the Minnesota Paid Leave program funded?
The program is funded through payroll premiums. For 2026, the premium rate is 0.88% of an employee's taxable wages. Employers must pay at least 50% of this rate, though they can choose to pay more. Small employers with 30 or fewer employees may qualify for a reduced rate of 0.66%.
Are remote workers eligible for Minnesota Paid Leave benefits?
Yes, remote employees are covered if they perform at least 50% of their work from a location within Minnesota. If an employee does not spend 50% of their time in any single state but resides in Minnesota, they are also covered.
What are the mandatory notification requirements for Minnesota employers?
By December 1, 2025, employers must display a state-approved workplace poster in a conspicuous area. Additionally, they must provide an individualized written notice to every employee — and obtain a signed acknowledgment of receipt — explaining their rights and benefits under the law.
