Paid Family & Medical Leave: What You Should Know
Minnesota legislation takes effect on January 1, 2026, creating a Paid Leave insurance program for workers in the state. The new program covers virtually all employers and applies to workers who have earned 5.3% or more of the State Average Annual Wage (SAAW) in the four previous quarters: approximately $3,781+ in 2024.
The program will be funded by premiums of .88% ($0.0088) of an employee’s wage, which can be shared evenly between employers and workers, and remitted by the employer by April 2026. Minnesota Paid Leave is a new division within Minnesota’s Department of Employment and Economic Development.
What does this mean to employers?
Employers should be familiar with the requirements and deadlines of the new Paid Leave program. Employers with less than 30 employees that have an average annual wage equal to or less than 150% of the State Average Annual Wage (In 2024 SAAW = $71,344.00 x 1.5% = $107,016.00) will qualify for a lower rate of .66% ($0.0066). There is also an alternative substitution of buying into private coverage plans meeting the program requirements.
What is Minnesota Paid Leave?
Paid Leave is the new state program that will ensure all Minnesota workers have access to paid leave to take care of themselves or their family during life circumstances that pull them away from their jobs – such as raising their family or taking care of a loved one with a serious health condition. Eligible employees will receive up to 12 weeks of personal medical leave and 12 weeks of family leave. However, an employee can collect no more than 20 weeks combined in a single benefit year. The benefit year is the 12-month period that starts when Paid Leave is first taken by an individual.
Leave Types
Medical Leave
Employee’s own serious health condition:
- Illness
- Injury
- Impairment
- Pregnancy or recovery from childbirth
- Physical/mental condition involving patient care
Family Leave
Child bonding, including
- newborn, adoption, and foster-care placement,
- Family caregiver when a covered family member has a serious health condition
Safe Leave
Leave as a result of being a victim of domestic violence, stalking, sexual assault, or sexual abuse
- Employee or employee’s family member.
Military Exigency Leave
When a covered family is called to active service.
- Time off to address needs related to a family member’s military service, including pre‑deployment preparations, attending military events, or caring for a service member recovering from a serious injury or illness.
Why Purchase PFML from a Private Company?
For employers evaluating alternatives to the state PFML plan, a private plan can offer added control,
consistency, and service advantages — all while meeting the same compliance and job-protection requirements.
- Proven Experience – Many private carriers already administer PFML in other states, with established
processes and trained service teams. - Predictable Claims Management – Documented review procedures may help reduce unnecessary
absences and support steadier workforce planning. - Faster, Dedicated Service – Established infrastructure can make it easier to meet timelines for claim
review, benefits payment, and customer support. - Flexible Plan Design – In some cases, private plans can be aligned with your company’s policies or
coordinated with other benefits. - Integrated Benefits Administration – Opportunity to bundle PFML with other insurance or HR
services, reducing vendor complexity - Direct Communication Channels – Dedicated account managers or service reps can provide consistent
support for HR teams and employees. - Operational Predictability – With millions of employees covered under Minnesota’s state PFML
program, claim volumes and review timelines remain uncertain. Private carriers’ established processes
may help maintain steadier schedules and workforce planning.
Disclaimer: This information is for general reference only and is not legal, tax, or benefits advice. Plan terms,
availability, and features may vary. Employers should consult their own advisors before making PFML
decisions.