Paid Leave Updates – February 2025

Implementation Update

Minnesota will be the 13^th state to launch a statewide Paid Leave program. We’re committed to collaborating with stakeholders to build an intuitive and accessible Paid Leave program that works for businesses, individuals, healthcare providers, and all Minnesotans.

Premium rate confirmed for 2026

Earlier this month, Paid Leave confirmed that when Paid Leave begins in 2026, the premium rate will be 0.88 percent. The premium rate is a percentage of an employee's wages that will be paid by the employee and their employer to fund the program.   For large employers who already offer private paid leave plans, the move to a state plan will often result in cost savings. And for small employers, Paid Leave will make a critical employee benefit affordable when it might not otherwise be. A new calculator tool can help employers and employees estimate their costs under Paid Leave. The tool gives an estimate of the premiums that will be first due in April 2026.

Upcoming webinars: learn more about Paid Leave!

Last month, Paid Leave launched a new monthly webinar series to help Minnesotans understand how Paid Leave will work and how it may benefit you or your organization. Paid Leave also hosts webinars on specific topics, like one coming up to help employers meet their responsibilities under Paid Leave.

Next webinars:

Can’t catch a webinar? Recording and slides available

If you are unable to join us for an upcoming webinar, the recording and slides are now available online from our last Intro to Paid Leave webinar. Watch the video below or find the slides on our website.

Hiring Spotlight

The Minnesota Paid Leave team is growing fast. We are a start-up in state government and are actively hiring for leaders to deliver on the promises of the legislation.

• Employer Services Analyst  Apply by March 3, 2025

Consider joining our team! You can always find our latest open roles on our website.

Top Questions We're Hearing

• When will premium collection and payment begin?
  
  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.

• Is there a maximum contribution for an employee?
  
  Yes, premiums are capped on wages at the Old-Age, Survivors, and Disability Insurance (OASDI) limit. This is the same wage base used by the Social Security program.

• How are premiums split between employer and employee?
  
  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.

• Do small employers pay less?
  
  Small employers pay a reduced premium rate under Paid Leave if they employ 30 or fewer people and the average employee wage is less than 150% of the statewide average weekly wage. The effective premium rate for small employers for the first year of the program is .66% of wages, two-thirds of which could be charged to employees.

• Are remote workers covered by Paid Leave?
  
  People are covered under Paid Leave if they worked 50 percent or more of the prior year in Minnesota. For people who did not work 50 percent or more of the year in any one state – for example, someone who split their time equally between three states – they are covered by Paid Leave if they live in Minnesota.

For More Information

You can find more information for employers, individuals, and families on our webpage here.

For more information on UI and Paid Leave employer accounts, visit the Unemployment Insurance website.

Still Have Questions?

If you have a Paid Leave question that isn’t yet answered on our website, please submit your question here.

If you need help with your Paid Leave Only or Joint UI/Paid Leave account, contact the Unemployment Insurance employer helpline.