The Paid Leave division is engaging Minnesotans early in the process as we work to build an intuitive and accessible Paid Leave program for individuals, employers, healthcare providers, and all Minnesotans.
Below are answers to common employer questions the Paid Leave team has received. Do you have a question that you don't see answered here? Please reach out to us.
The first quarterly wage detail reports are due on October 31, 2024. These reports are submitted by employers and detail the wages paid to employees between July 1, 2024, and September 30, 2024.
Paid Leave is paid for by premiums on employee wages, split between the employer and employees. Employers can begin to deduct the employee share of the premium on January 1, 2026, when benefits become available. Employers will pay the first premiums to the State of Minnesota's Department of Employment and Economic Development by April 30, 2026. First premiums will be based on wages paid from January 1, 2026 to March 31, 2026.
Every quarter, employers are required to submit a report to the state that details wages paid to their employees. After benefits begin in 2026, this information will determine the premiums paid by employers and employees, and the eligibility and benefit amount for individuals under Paid Leave.
To make things easier for employers, the Paid Leave division will use the existing Unemployment Insurance (UI) system to collect quarterly wage detail reports for Paid Leave. If all of an employer's employees are covered by UI, that employer will not need to take any new action – the employer's existing UI account has already been converted to a joint UI and Paid Leave account, and their quarterly wage detail reports will now serve both UI and Paid Leave.
For organizations whose employees are not covered by the Unemployment Insurance program, employers will need to set up a Paid Leave Only account through the UI online system. Employers can register for a Paid Leave Only account on the Unemployment Insurance Minnesota website. Additional technical assistance is available from experienced UI staff for account setup.
For more information on wage detail data formats, and submission methods, please visit the Unemployment Insurance Minnesota website.
The first Paid Leave Only wage detail report will be for wages paid from July 1, 2024, through September 30, 2024. This wage detail report is due by October 31, 2024. Paid Leave Only employers will be able to report their wage details for this period beginning on October 1, 2024.
Some employers have some, but not all, of their employees covered by Unemployment Insurance.
For employees covered by both UI and Paid Leave, a joint UI and Paid Leave account has already been created for these employers. For other employees not covered by UI, employers will need to also need to create a Paid Leave Only account. Once these employers have both accounts created, they will submit a separate wage detail report each quarter: one for employees covered by UI and Paid Leave through their joint account, and one for employees covered by Paid Leave Only.
For more information and to register for a Paid Leave Only account visit the Unemployment Insurance Minnesota website.
The quarterly wage detail reports submitted for Paid Leave are identical to what employers already submit to UI today. More information on wage detail submission formats can be found on the Unemployment Insurance Minnesota website.
Paid Leave uses the same wage definition as the Unemployment Insurance (UI) program.
To make things easier for Minnesota employers, the wage details reported for Paid Leave will be the same wage details already reported for Unemployment Insurance (UI).
When reporting wage details for employees not covered by UI, wages include all compensation for employment, including commission, bonuses, benefits payments, tips and gratuities, and most goods and services provided as compensation.
No, the first premiums are not due until April 30, 2026, after the program launches, based on wages paid between January 1, 2026 and March 31, 2026.
The first reports are due on October 31, 2024 based on wages paid between July 1, 2024, and September 30, 2024.
Employers will need to provide the first and last name, social security number, wages paid and hours worked for each employee. This is identical to information provided for Unemployment Insurance wage detail reports.
More information on data formats and submission methods for wage detail reporting can be found on the Unemployment Insurance Minnesota website.
Paid Leave is paid for by premiums on employee wages, split between the employer and employees. Employers can begin to deduct the employee share of the premium on January 1, 2026, when benefits become available. Employers will pay the first premiums to the State of Minnesota's Department of Employment and Economic Development by April 30, 2026. First premiums will be based on wages paid from January 1, 2026 to March 31, 2026.
The total Paid Leave premium rate includes both a Family Leave and a Medical Leave premium split between employer and employee contributions.
The premium rate for the program's first year, 2026, has not yet been set. The premium rate will be set each year, subject to a maximum set in state law, based on how the program is running and best budgeting practices to keep the fund at a healthy level. The Department of Employment and Economic Development (DEED) will work with a qualified independent consultant to conduct a study for this purpose every year.
Starting in January 2026, employers will contribute a minimum of 50 percent of the total premium, though they may choose to pay up to 100 percent of the premium. Employers will be able to deduct the remainder from employee pay, up to a maximum 50 percent of the premium.
Yes, premiums are capped at the Old-Age, Survivors, and Disability Insurance (OASDI) limit. This is the same wage base used by the Social Security program.
No, the rate is set for all employers annually and is not adjusted based on employees' utilization of the program.
Paid Leave covers most employers in the state.
Paid Leave covers most Minnesota employers with one or more employees, with exceptions for employees of tribal nations or the federal government and self-employed individuals who choose to provide their own coverage for themselves.
Self-employed individuals and independent contractors are not covered by Paid Leave but can choose to opt in beginning in 2025.
All employers, regardless of size, are required to participate in Paid Leave unless they are specifically exempt from the law. There is no exclusion in the law for small employers.
Small businesses with 30 or fewer employees will be eligible for reduced premiums and may be eligible for small business assistance funding to hire temporary workers or to increase an existing worker's wages.
Paid Leave is a new program distinct from Unemployment Insurance (UI). The Paid Leave law does not exclude the same employers that are excluded from UI. For example, religious organizations, non-profits, and agricultural employers are all required to participate in Paid Leave.
Yes, municipalities and local government entities are required to participate in Paid Leave.
Yes, part-time employees are covered under the program.
Employers who are otherwise required to participate in Paid Leave may seek an exemption from the Paid Leave law by applying for a private plan exemption beginning in 2025. Employers must offer a private plan with at least the same rights, protections, and benefits provided to employees under the Paid Leave law. To be considered for a private plan exemption, the employer will need to submit documentation showing proof of coverage and that the plan fully meets the requirements laid out under the Paid leave law.
Paid Leave is working with the Minnesota Department of Commerce on a process to allow carriers to sell private plans that would qualify for an exemption. No plans have been approved for sale in Minnesota at this time.
Paid Leave benefit payments will be considered taxable income under state law. The IRS has yet to provide guidance on the federal tax treatment of Paid Leave benefits.
Yes. Paid Leave benefit payments will be paid by the state to individuals under the program.
Yes. Employers will be able to designate certain paid benefits like Paid Time Off, vacation and sick time as "supplemental benefits," which will allow employees to choose to receive up to full salary continuation during their leave. The decision to offer supplemental benefits is completely up to the employer.
The Family and Medical Leave Act (FMLA) is a federal program administered by the US Department of Labor's Wage and Hour Division. FMLA entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage. Minnesota Paid Leave and FMLA leave may be taken concurrently, but the requirements are different.
Employers can require that leave taken under Paid Leave run concurrently with leave taken for the same purpose under FMLA.
No, Paid Leave does not replace the Minnesota Parental Leave Act (MPLA). However, employers may require that leave taken under Paid Leave run concurrently with leave taken for the same purpose under the MPLA.
No, these are two different programs. The Earned Sick and Safe Time program is administered by the Department of Labor and Industry and began on January 1, 2024. Sick and safe time is paid time off employers must provide to employees in Minnesota for certain uses.
