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Navigating changes in employment law can be complex for Minnesota employers preparing to implement the new Paid Leave law, which goes into effect on January 1, 2026. At Doherty Staffing Solutions (Doherty), we understand the complexities of employment regulations. We are here to help businesses like yours stay up-to-date with upcoming employment law changes. From understanding the law’s requirements to implementing best practices, we are your trusted partner in navigating these updates and creating a workplace that supports compliance and employee well-being. In this article, discover more about the Paid Leave law, the key changes employers need to know, and how you can begin preparing.

Understanding the New Minnesota Paid Leave Law

The Minnesota Paid Leave Law, which will take effect in January 2026, provides employees with paid time off to treat their own serious health conditions, care for a family member with a serious health condition, or bond with a new baby or child in their families. The Paid Leave law defines family members the following:

• Spouse or domestic partner
• A child, including a biological, adopted, or foster child, a stepchild, or a child to who the applicant stands in loco parentis, is a legal guardian or is a de facto parent
• Parent or legal guardian of the applicant
• Sibling
• Grandchild (a child of the applicant’s child)
• Grandparent or spouse’s grandparent (a parent of the applicant’s parent)
• Son-in-law or daughter-in-law
• Individual who has a relationship with the applicant that creates an expectation and reliance that the applicant cares for the individual, whether or not the applicant and the individual reside together

This initiative is designed to help workers balance their professional and personal lives without the financial burden often accompanying unpaid leave. Under this new law, eligible employees can take up to 12 weeks of paid leave, funded through an employer or a combination of employer/employee payroll tax premiums. Paid Leave law allows for partial wage replacement for a maximum of 12 weeks for family leave or a maximum of 12 weeks for medical leave. The employee may use both leave programs in a single benefit year, with a maximum combined total of 20 weeks in a 12-month period that begins when the paid leave is first taken. Employers will have the option to participate in the state-administered program or may opt to offer employees a private plan. Private plans must be approved by the state, and at the time of publication, no private plans have been approved by Minnesota. Understanding the intricacies of this law is crucial for employers to integrate it effectively into their existing policies.

Key Updates: What Employers Need to Know

With the Minnesota Paid Leave law, the following changes will go into place:

• Increased payroll taxes: The state initially proposed a 0.7% payroll tax for employers. Upon further review, 0.88% was proposed as the rate to support the program. The Annual premiums cannot exceed 1.2% of taxable wages. Employers with less than 30 employees may be eligible for a reduced payroll tax premium. Paid Leave benefit payments will also be considered taxable income under state law.
• Expanded coverage: Self-employed individuals and independent contractors are not covered by Paid Leave, but they may choose to opt into the program.
• Wage replacement: The total compensation during leave cannot exceed the employee’s regular pay. This includes, but is not limited to, the utilization of supplemental benefits provided by the employer (e.g., PTO, vacation/sick time, and other paid leave programs).

The Paid Leave law applies to all Minnesota employers with one or more employees. Employees must be out for a minimum of seven consecutive calendar days for one of the qualifying reasons to be eligible to receive the benefit. There is no seven-day requirement in the event of childbirth or bonding leave. Employees seeking leave must provide adequate certification from a health care provider or supporting documentation from a professional, even if the leave is required for family caregiving. The Paid Leave law allows for intermittent and continuous leave, according to Winthrop & Weinstine law firm. Another important note is that employers must maintain health benefits for employees on leave as if they were still working. Additionally, job protection is a significant component of this law, meaning employees are entitled to return to their same or equivalent position after their leave period, similar to existing FMLA laws. Below are important dates for Minnesota employers, according to the Minnesota Department of Employment and Economic Development (DEED):

What can employers do now to begin preparing for this new law?

• Subscribe to the Minnesota Paid Leave website for email updates
• Determine if the state-sponsored plan or a private plan would be best suited for their organizations
• In the summer of 2025, employers with fewer than 30 employees can apply for grants and other resources related to the Paid Leave program
• Employers should decide whether to share the payroll tax cost with employees or cover all of it

Where can companies find additional resources for help with compliance?

Companies seeking guidance on complying with the Minnesota Paid Leave law can access various resources to ease the transition. The official Minnesota Paid Leave website offers detailed information about the law, including eligibility, employer responsibilities, and implementation timelines. Employers can also benefit from webinars, training sessions, and seminars hosted by compliance organizations and legal experts. Additionally, Doherty provides tailored support and resources to clients, including up-to-date insights and practical tools for managing compliance effectively.

Partnering for Compliance & Workplace Success

Adapting to the Minnesota Paid Leave law is essential for maintaining compliance and fostering a supportive work environment. With proper planning, clear communication, and strategic implementation, businesses can turn this regulatory change into an opportunity to enhance their workplace culture. As an attorney-led, compliant staffing firm, Doherty offers the insights, expertise, and resources needed to ensure your business thrives under these new requirements. Contact us today to strengthen your foundation for compliance and employee success!