Minnesota Paid Family Leave and Medical Leave Program Becomes Law

2017 was a brutal year for Tony Kay Manskau.

Her mother, who has autism, was undergoing cancer treatment when her brother, whom she cared for, was in intensive care for several weeks. Her children also had health problems and needed her attention.

“It’s just a struggle to want to be there for the people you love,” said Manskau, whose only option was unpaid leave. The health worker lost a third of her income that year.

She was among supporters who gathered at the state capitol on Thursday to watch Minnesota become one of more than a dozen states to approve paid family and medical leave requirements.

Governor Tim Walz has launched a national program that guarantees workers can take weeks or months of leave with partial pay after giving birth or if they or their family members develop a serious health condition. Approved the creation of They will also be able to take leave after adoption, in connection with a family member’s military service, or in situations such as domestic violence, sexual assault or stalking.

“The majority of countries are doing this because they know it’s the right thing to do,” Waltz said. “They also know that building the economy and making it resilient, strong and healthy is the right thing to do.”

This change will not take effect until January 2026. Congress delayed the start of the program by six months, one of several adjustments made in response to concerns from business owners and other employers, including school districts.

Lawmakers also scaled back an initial plan to allow workers to take up to 12 weeks off for their own health problems and up to 12 weeks to care for others in the same year. Instead of a total of 24 weeks of leave, we set a limit of 12 weeks for each type of leave and a cap of 20 weeks. Advocates said people rarely get the full hours allowed and must meet certain health requirements to qualify.

Despite the adjustments, business leaders said they felt they were not being heard in the Capitol this time.

“This is going to be a huge burden on businesses. It will increase the cost of doing business in Minnesota,” said Doug Roone, president and CEO of the Chamber of Commerce. “Unfortunately, what we are seeing is enacting legislation without listening to all perspectives. Some may call this bold, but I think it is more I think it’s going to be dichotomy.”

Lauryn Shotoast of the Chamber of Commerce said in a statement Thursday that chamber members have already designed, implemented and managed complex benefit packages, making the country’s program “flexible, feasible and equitable.” He added that he believes adjustments are needed to make it work. The group will insist on revamping the program ahead of its launch in two and a half years, she said.

The state is using $668 million of its projected budget surplus to revitalize its paid leave program. When it starts in 2026, it will be funded by a 0.7% payroll tax levied on employers, similar to unemployment insurance. Employers will be able to pass half of that cost on to their employees.

With potential tax increases, other states with paid vacation policies also need such adjustments. But in another change late in the session, the Minnesota legislature agreed to cap interest rates at 1.2%.

The new law requires the state to conduct an actuarial analysis of the program’s finances this year, including whether the 0.7% payroll tax figure is sufficient. Republican lawmakers stressed during the conference that the analysis should have been done before the bill was passed.

“We may have to exceed the 1.2% cap. Nevertheless, we are running the program without actuarial research or qualified analysis other than what the proponents have done.” said Senator Eric Pratt (R-Prior Lake) during his speech. Final consideration in the Senate on the bill.

Instead, Republicans want employers to be able to use private insurance plans to take paid time off and the state to provide tax credits to businesses that benefit from them.

Democrats countered that the private market did not meet the needs of Minnesotans. In Thursday’s bill signature, they said their plan had received enough scrutiny after a decade of commitment, numerous commission hearings, and watching 11 other states pass similar programs. Stated.

House bill sponsor Ruth Richardson (DFL Mendota Heights) says employers will have to join state plans or opt out if they offer equal or better benefits starting in 2026. .

“Because it’s a statewide pool, it actually creates one of the most affordable options for paid family and medical leave,” Richardson said of the state program. “So even some of the big companies that offer it often pay far more to actually offer similar perks.”

Richardson noted that the new law will reduce payroll taxes for small businesses because employers with fewer than 30 employees can cut costs.

Lawmakers also passed a paid sickness and safety hours bill in this session that would allow workers to take paid time off for short absences, such as seeing a doctor or caring for a child with the flu. Businesses must bear the cost of that requirement.

Joy McAfee, a doula and small business owner, was among those who gathered at the Capitol to celebrate the holidays. She said she has helped many parents who lack sufficient paid time off to heal and bond with their newborn babies. When she gave birth to her first child, her husband was unable to take time off and she had to care for her son while experiencing severe postpartum depression.

“I see parents breaking down constantly like, ‘How am I going to make this work? How am I going to do this?'” McAfee said. “This bill will change how families manage their ability to care for themselves, their ability to attach and tune in to their children, and their ability to care for their loved ones.”

Staff writer Briana Bierschbach contributed to this report.

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