Agenda - Council Work Session - 07/08/2025

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Small employers Effective Jan. 1, 2026, a reduced premium rate of 75% of the annual calculated premium rate will be available for small employers with: • 30 or fewer employees, and • The city's employees' average employee wage falls under 150% of the statewide average annual_ wage (SAAW) for the basis period ($107,016 in 2025). The state will notify small employers later in 2025 if they qualify for this small employer rate in 2026 (equivalent to .22% of payroll for 2025, compared to the typical large employer minimum rate of .44%). The employee premium remains the same for both large and small employers at up to 50% of the full premium. Return to top of page Q6. Will there be annual cost increases? A6. The premium plan rate will be calculated annually for the following calendar year based on program historical experience and sound actuarial principles so the projected fund balance as a percentage of total program expenditure does not fall below 25%. DEED will contract with a qualified independent actuarial consultant to conduct an actuarial study for this purpose every year. As outlined in Q5, cities budgeting for 2026 will want to include .88% of taxable wages paid to each employee based on DEED's release of 2026 premium rates. Pursuant to Q17, there may be a cost sharing option on premiums with employees, but such cost sharing likely requires negotiation for represented employees. Return to top of page Q7. Is there a "reimbursement employer" public sector option available, similar to unemployment compensation? A7. There is no option to become a "reimbursement employer" as is the case with unemployment compensation. All city employers are covered by this new law unless they apply for an exemption through an application process to demonstrate they provide employees with an equivalent plan that meets or exceeds the coverage offered through the state. (see Q14). Return to top of page Q8. What is the role of the city in administering this program? A8. Employers will have essentially three categories of responsibilities under the Minnesota Paid Leave program: (1) notification requirements, including educating and informing employees (2) reporting wages and paying premiums to fund the program and (3) coordinating benefits and leaves during an absence. • Notification requirements, including educating and informing employees. The city must display DEED's uniform workforce poster in a conspicuous place and provide written information provided by DEED to employees about the paid leave program 30 days before