Minnesota's Paid Family and Medical Leave Act Goes Into Effect January 1, 2026

The Minnesota Paid Family and Medical Leave Act (PFMLA) goes into effect on Jan. 1, 2026. The PFMLA applies to nearly all private Minnesota employers, regardless of size. It also covers both full- and part-time workers who, during the calendar year: (1) work at least 50 percent of their time within Minnesota; and (2) have earned at least 5.3 percent of the statewide average annual wage in the past year (which, for 2025, means about $3,900). In addition, the PFMLA applies to remote workers if 50 percent or more of their employment during the calendar year is not performed in Minnesota or any other single state within the United States, but some of the employment is performed in Minnesota and the employee's residence is in Minnesota during 50 percent or more of the calendar year.

The PFMLA establishes a new payroll tax, which is currently set at .88 percent for 2026. Generally, this rate will be split equally between employers and employees (with .44 percent paid by employees and .44 percent paid by the employer). However, the payroll tax cannot reduce an employee's earnings below the minimum wage. Thus, if a .44 percent tax would reduce an employee's wage below the minimum wage, the employer may be required to assume a greater share. If an employer has 30 or fewer employees and has an average employee wage under 150 percent of the state average pay ($1,423 per week), the employer is considered a "small employer" and a lesser payroll tax rate of .66 percent will apply. A small employer is required to cover only .22 percent of the tax rate, with the employee paying up to .44 percent. The tax rates may change per year, up to a maximum cap of 1.1 percent.

Employers are required to provide notice of the PFMLA in two ways: (1) by posting an employee poster; and (2) by individually notifying employees, who must acknowledge having received the information. Both notices should be provided to the employee in English and in an employee's primary language, if the employee's primary language is the primary language of five or more employees. These notices should have been provided to employees by December 1, 2025. Any employer who has not yet provided the required notices should do so as soon as possible. Moving forward, in addition to being posted, the notices must be provided to new employees within 30 days of hire.

The State of Minnesota will determine whether an employee is eligible for leave and the amount of benefits they may receive. Additionally, if eligible for PFMLA, employees are eligible for up to 12 weeks of job-protected leave in the following situations:

1. For their own serious health condition (including pregnancy);
2. To care for a family member (which is broadly defined) with a serious health condition;
3. For bonding (defined as time spent by an employee in conjunction with the birth, adoption, or foster care placement of an employee's child);
4. For safety leave (leave because of domestic abuse, sexual assault or stalking of the employee or an employee’s family member for qualifying reasons); and
5. For a qualifying exigency for a designated need arising from an employee’s active-duty military service.

An employee who was employed for at least 90 days before taking leave will be entitled to reinstatement to their job, or to an equivalent job, upon returning from leave, and is entitled to maintain their health insurance coverage while on leave.

What Employers Should Do Now

Minnesota employers should prepare for the PFMLA by setting up payroll processes necessary to comply with the PFMLA payroll tax effective Jan. 1, 2026. Employers should also ensure they have posted and provided the required notices to employees, and then provide notices to future hires as required. Employers should also review and update their leave policies to address the PFMLA.

If you have any questions about the Minnesota Paid Family and Medical Leave Act, please contact Matt DeLange or your Reinhart attorney.