Minnesota’s Paid Family Medical Leave Requirements in a Nutshell

Minnesota’s new Paid Family and Medical Leave (PFML) law goes into effect on January 1, 2026. Because the implementation date is approaching, employers should begin preparing now for the program’s requirements. Below is a streamlined overview of the key obligations and benefits under the law. 

Overview of Minnesota’s Paid Family and Medical Leave Law 

Minnesota’s PFML program provides job protections and wage replacement benefits to individuals who need time away from work to care for themselves or their families. Employers should be aware of several core features of the law: 

• The program offers payments through the State, approved private insurers, and qualified self-funded plans. 
• PFML will be funded by equal employer and employee contributions, although employers may choose to assume more of the employees’ share. 
• Participation is mandatory for covered employers and employees. 
• Eligible employees receive benefit payments during approved leave periods. 

Are All Employees Covered by Minnesota’s PFML Law? 

Most employees working in Minnesota will be covered, but there are important thresholds to consider: 

• Employees must have earned at least 5.3% of the statewide average annual wage during the prior year (equivalent to $3,900 in 2025). 
• Coverage generally applies to employees who worked 50% or more of their time in Minnesota, or, if their work was not concentrated in any one state, employees who reside in Minnesota. 
• Certain seasonal workers are excluded. 
• Employees receiving Unemployment Insurance, Workers’ Compensation, or Social Security Disability Insurance during their absence are not eligible for PFML benefits. 

What Types of Leave are Covered by Minnesota’s PFML Law? 

Minnesota’s PFML program covers both medical leave and family leave. Employees may take one or both types of leave within a benefit year, subject to certain limits. 

Medical Leave 

• Up to 12 weeks per year to address the employee’s own serious health condition. 

Family Leave 

Up to 12 weeks per year for the following purposes: 

• Caring for a family member with a serious health condition. 
• Addressing needs related to a family member’s active-duty military service. 
• Bonding with a child within 12 months of birth or adoption. 
• Recovering from or responding to domestic violence. 

Additional Key Rules 

• Qualifying conditions must last more than seven days and be certified by a health care or other approved provider. 
• Eligibility resets annually based on the date the qualifying leave begins. 
• Employees may receive up to 20 weeks combined of medical and family leave if they qualify for both categories. 

What are the Benefits of Minnesota’s PFML Law? 

Benefits are paid either by the State, an approved private insurer, or as provided in a self-funded plan. Important benefit features include: 

• Employees may receive up to 90% of their regular wages, depending on income level. 
• Payments are determined on a sliding scale. 
• The projected maximum weekly benefit for 2026 is $1,423. 
• Employers may allow employees to “top off” PFML payments using PTO, vacation, Earned Sick and Safe Time (ESST), or short-term disability benefits—provided these payments do not exceed applicable caps. 
• Offering top-off options is voluntary, but policies must clearly outline whether and how topping off is permitted. 
• Any employer-provided top-off payment must be reported.

How are Premiums Paid for Minnesota’s PFML? 

Premiums begin in 2026 and are funded through payroll withholding similar to FICA taxes. 

• Premiums are split 50/50 between employers and employees, although employers may voluntarily cover a larger share. 
• The initial premium rate will be 0.88% of each employee’s wages, up to the Social Security wage base ($183,300 in 2026). 
• The first premium payment is due April 30, 2026. 
• Employers must submit quarterly wage detail reports through the Unemployment Insurance system. 
• Employers with 30 or fewer employees and average wages of 150% or less of the statewide average (i.e., $107,016 in 2025) may qualify for reduced premiums of up to 50%. 
• Employee contributions are collected on post-tax wages. 
• Employers may deduct their premium contributions as an excise tax. 
• Amounts paid beyond the minimum required employer share can be deducted as an ordinary and necessary business expense. 
• Employee contributions and any employer pickup contributions must be reported on Box 14 of the W-2, labeled MNPFML. 
• Employers may use private or self-insured plans, subject to approval by the Minnesota Department of Employment and Economic Development (DEED) – more on that in my recent article here. 

How are Plan Benefit Payments to Employees Treated? 

Benefit payments are treated differently depending on whether the leave is medical or family-related: 

• Medical Leave payments are not treated as wages for employees. 
• Employees who receive Family Leave payments from the State will receive a IRS Form 1099. 
• A portion of Medical Leave payments sent to employers is treated as third-party sick pay and is subject to Social Security and Medicare taxes. 
• This taxable portion is 50% for most employers and 33% for small employers. 
• Employers must report this amount as wages on the employee’s W-2. 
• The State will provide employers with the taxable amount. 

Additional Employer Obligations 

Employers must comply with several procedural and notice-related requirements: 

• Employers may not interfere with or retaliate against employees for using PFML benefits. 
• Employees must be restored to their position or an equivalent role upon returning from leave. 
• Job protection begins 90 days after hire. 
• Employers must continue paying the employer share of health insurance premiums during leave. 
• Employers using the state plan must establish two DEED accounts: an Employer Account and an Administrator Account. 
• By December 1, 2025, employers must notify employees about PFML rights and obligations through both of the following: 
  • Workforce poster: 
    • Must be displayed in English and in any language spoken by five or more employees. 
    • Posters will be available on the PFML website. 
  • Individual notice: 
    • Must be provided to new employees within 30 days of hire or 30 days before premium collection begins. 
    • Notices must be provided in the employee’s primary language. 
    • Employers must maintain records demonstrating that notices were delivered and acknowledged. 

Small Employer Premium Relief  

Qualifying small employers with 30 or fewer employees whose average weekly wage is below 150% of the state’s average weekly wage will enjoy a reduced premium rate of 0.66%. The current average weekly wage is $1,423, therefore, businesses with average employee wages below $2,134.50 qualify for the premium discount. 

Need Guidance on PFML Compliance? 

If you have questions about how Minnesota’s Paid Family and Medical Leave law applies to your organization—or need help updating your policies and practices before the 2026 rollout—reach out to me for assistance. I advise employers on compliance, policy development, and day-to-day employment law challenges and can help ensure your business is prepared for the changes ahead. 

Frequently Asked Questions About Minnesota’s Paid Family and Medical Leave 

When does Minnesota’s Paid Family and Medical Leave program begin? 

Minnesota’s PFML program begins on January 1, 2026. Employers must begin premium withholding in early 2026, with the first payment to the State due April 30, 2026. 

Do small employers have different requirements under PFML? 

Most PFML requirements apply to all employers, regardless of size. However, employers with 30 or fewer employees and average wages at or below 150% of the statewide average may qualify for reduced premium rates of up to 50%. All other compliance obligations—including job protection and notice requirements—still apply. 

Can employers use a private plan instead of the State’s PFML program? 

Yes. Employers may use private insurance or self-insured plans if they meet the State’s benefit, cost, and administrative requirements and receive approval from the Minnesota Department of Employment and Economic Development (DEED). Premium obligations do not apply once an equivalent private plan is approved. 

Can employees use PTO or ESST while receiving PFML benefits? 

Yes, but only for the purpose of “topping off” the State benefit. Employers may allow employees to use PTO, vacation, ESST, or short-term disability benefits to increase their weekly income up to, but not beyond, applicable caps. Policies must clearly state whether topping off is permitted. 

Are PFML benefits job-protected? 

Yes. Employees must be restored to the same position or an equivalent role when their leave ends. Job protection begins 90 days after hire, meaning newly hired employees gain protection after that period. 

How much will employees receive in PFML benefits? 

Eligible employees receive partial wage replacement based on a sliding scale, capped at a projected $1,423 per week in 2026. Exact benefit amounts depend on income and the State’s formula. 

What documentation is required for PFML leave? 

Employees must provide certification from a health care provider or other approved professional showing that the qualifying condition lasts more than seven days. For bonding leave, proof of birth or adoption may be required. 

How does PFML interact with Workers’ Compensation or Unemployment Insurance? 

Employees receiving Workers’ Compensation, Unemployment Insurance, or Social Security Disability Insurance during their absence are not eligible for PFML benefits at the same time.