Agenda - Council Work Session - 07/08/2025

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The total number of weeks that an employee may take benefits in a single benefit year for a serious health condition is the lesser of 12, or 12 weeks minus the number of weeks that the employee received benefits for bonding, safety leave, family care, and qualifying exigency within the same benefit year, for a maximum of 20 weeks. Return to top of page Q4. What job protections does this law provide to employees? A4. An employer cannot retaliate against an employee for requesting or obtaining Minnesota Paid Leave, nor can it obstruct or interfere with an employee applying for the paid leave. An employee must be returned to the same position they held when the leave started, with equivalent benefits, pay, and other terms and conditions of employment. Return to top of page Q5. How much will this new program cost and how is it funded? A5. The program is funded in large part by employer premiums and, in some cases, employee contributions. DEED will collect quarterly electronic premium payments, in the form of a percentage of payroll taxes, from Minnesota employers. Beginning January 2026, employers will contribute a minimum of 50% of the total premium, though they may choose to pay up to 100% of the premium. Employers may, in some cases, deduct the remainder from employees' pay, up to a maximum 50% of the premium (refer to Q17), but such cost sharing likely requires negotiation for represented employees. The first payroll deductions begin on Jan. 1, 2026, with premiums due to DEED by April 30, 2026, based on wage detail reported between Jan. 1, 2026, and March 31, 2026. For reference, initially, Minnesota Paid Leave provided for a 0.7% payroll tax for premiums. On May 13, 2024, an actuarial and consulting firm, Milliman, presented to the state the rate may need to be increased to 0.88% to sufficiently fund the paid leave program. On Feb. 21, 2025, DEED posted on its website, the premium rate for 2026 will be 0.88%. Premiums are capped at the Old -Age, Survivors and Disability Insurance (OASDI) limit ($176,100 for 2025); the same wage used by the Social Security program. Effective Aug. 1, 2025, there is a cap of 1.1% of taxable wages on the premium rate in the paid leave law. Prior to 2025, this cap was 1.2% but was reduced to 1.1% in the 2025 special session. DEED includes a premium calculator on its Minnesota Paid Leave webpage so applicants can better estimate their benefits. Please refer to Q4 for details on taxes. Going forward, premium rate adjustments will be made by July 31, 2026, and then by July 31 each year thereafter 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. A new calculator tool to help employers and individuals estimate costs under paid leave is now on the DEED website. There are some reductions in cost for employers with fewer than 30 employees.