By: HUB's Absence Management Team

On May 25, 2023, Minnesota’s Governor signed into law HF 2 which makes Minnesota the latest state to require employers to provide statutory Paid Family and Medical Leave starting January 1, 2026.

Overview: Minnesota’s Paid Family Medical Leave Law

The bulletin will cover the basics of what is in the text of the legislation. MN has not established the commission that will run and pay benefits and the rulemaking process has not begun yet. As a result, updates will occur prior to January 1, 2026. Virtually all business and public sector entities in Minnesota will be required to participate in the program. Federal employees and certain self-employed individuals are not eligible for coverage.

In summary the bill provides the following:

  • Offers 12 weeks of family leave and 12 weeks of medical leave with a maximum cap of 20 weeks between both benefits. This means that an employee cannot use more than 20 weeks of MN PFML in a given 12-month period.
  • The law covers all FMLA qualifying conditions as well as domestic and sexual violence reasons.
  • Benefits are paid based on their weekly wages. Workers who earn less than 50% of the state’s defined average weekly wage will earn 90% of their weekly wages.
  • Employees who earn more than 50% of the states average weekly wage would 66% of their average weekly pay.
  • Employees who earn more than double of the states average weekly wage will receive 55% of their average weekly wage.
  • Employees can file leaves up to 60 days before leave is taken.
  • Eligible employees must have wage credits of at least 5.3% of the state’s average annual wage rounded down to the nearest $100.00. Seasonal employees are not eligible for benefits under the program unless certain criteria are met.
  • The law provides job and benefit protection while out on MN PFML.

Other notes

  • The plan does have a 7-day elimination period for medical and family care events, but that elimination period is waived for bonding events.
  • Intermittent usage of MN PFML is allowed under the legislation and is limited to a maximum of 480 hours (12 weeks per FMLA regulations) of intermittent paid time.
  • The law does allow for employers to use private plans in lieu of administering the benefit through the state. Employers must at a minimum equal the states plan and if the employer is self-insuring the plan, they must provide a surety bond in order to administer the private plan.
  • Family Member is defined as spouse or domestic partner, child (included stepchildren), parent or legal guardian, siblings, grandparents (self and spouse), grandchildren (Only applicants), son or daughter in-law, individuals who has a relationship with the applicant that creates an expectation and reliance that the applicant care for the individual regardless of they reside together or not.
  • This law does not prohibit employers for offer complementary benefits such as short-term disability, paid parental leave or other company defined benefits.

FUNDING

  • Funding shall be .7% (.4 for medical and .3% for family leave) subject to the maximum social security wage limit. Per the legislation, annual premiums while adjustable, cannot exceed 1.2% of the employees’ wages.
  • Employers must pay a minimum of 50% of the annual premiums (although they could pay more) and employees are responsible for the remaining premiums.
  • Small businesses (those with fewer than 30 employees) do have wage exclusions available to lower their employer premium portion.

Next Steps

While this is just a brief overview, HUB’s Workforce Absence Management (WAM) team will continue to monitor as Minnesota begins its rule making process. Employers should be aware that this is coming but no immediate changes are required at this time.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s specific circumstances. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your organization’s particular needs.