Minnesota Paid Leave Law
Starting in January 2026, Minnesota will enact Paid Leave Legislation, becoming the 13th state to do so. This guarantees job protection and partial wage replacement for individuals unable to work due to a qualifying condition lasting at least seven days. Paid Leave can be used for but not limited to medical, caregiving, safety, parental leave, and active-duty reasons. A healthcare provider or professional may be needed to approve qualifying reasons.
Who is eligible?
Both full-time and part-time employees are covered if an employee has earned 5.3% of Minnesota’s average annual wage during the base period. For job protection and security, an individual must have worked for an employer for 90 days.
Nearly all employers must carry this benefit unless the employees fall under the limited list of exceptions:
- Federal Employees
- Self Employed or Individual Contractors
- Designated seasonal hospitality employees who work fewer than 150 days
- Employers who have a private plan.
- This plan must be equal to or above the state plan. This includes rights, protections, and benefits. You must also submit proof to the state.
Employee and Employer Premiums
An employer must pay half of the required premium cost at a minimum. Employers may choose to pay additional funds into premium costs, but this is optional. Any cost not paid by the employer is the full responsibility of the employee. The standard premium rate is set at 0.7% as of July 2024 for all employees paid wages, so both employees and employers will each contribute 0.35%. This rate is subject to change.
When does the program start?
On January 1, 2026, the program launches and employees will be able take leave and receive benefits from then on. The first premiums will be due April 30, 2026. However, employers must start reporting their first wage detail reports to the state for informational purposes by October 31, 2024 or the end of Q3. This wage detail report would cover wages paid from July 1 through September 30.
In short, employers must start tracking their contributions beginning July 1, 2024.
If the employer is not required to participate in Minnesota State Unemployment Tax (SUTA), they are not exempt from having to report wages to the paid leave program. For example, religious organizations, non-profits, and agricultural organizations are all required to participate in the paid leave program if they do not qualify under the limited exceptions mentioned earlier.
How to register to start reporting
Christianson is here to be a helping hand. Reach out to us and we can guide you through the steps of registering for a seamless transition.
If you want to register yourself, go to this link and follow these steps:
- Select register towards the bottom of the page.
- Review the information on the first page and click next.
- Agree to the terms and conditions and select next.
- Finalize registration
- If your organization requires a paid leave account, select “Register for a Paid-Leave-only” account and complete the steps to register.
- If registering a new business, select the option for both Paid Leave and SUTA account, then complete the steps to register.
What you should do next in preparing for the upcoming program
- Confirm you have a Minnesota Unemployment Account that is active.
- If you have an account but it is not active, you will want to consult with your payroll professional or call the Minnesota Unemployment Insurance customer service line at 651.296.6141 and request to have your account opened as you need to start reporting wages for the Paid Leave program.
- If you have an account, step one is done, and you will start to report wages for information purposes to the Paid Leave program come Q3 2024 when you file your Minnesota Unemployment return.
- If you do not have an account, please follow the steps above under the section How to register to start reporting. If you would like assistance with registering for an account, please reach out for assistance!
New Changes to Sick and Safe Time (ESST)
The Minnesota Department of Labor and Industry sent out updates to clarify the qualifications of the Earned Sick and Safe Time (ESST) law. We wanted to highlight a few key changes to this law that are effective as of May 25, 2024.
Earnings Statement
Employers no longer need to add ESST hours accrued to an employee’s earnings statement or paychecks. If an employer chooses to provide this information, an electronic option is available as long as an employer-owned computer is provided to view and print this information. Employers are only required to provide employees with the total accrued ESST hours and ESST used at the end of each pay period.
Covered Employees
In Minnesota, covered employees are those who are anticipated to work at least 80 hours in a year for an employer. This requirement does not apply to the following:
- Volunteer or paid on-call firefighters
- Volunteer ambulance attendants
- Paid-on-call ambulance service personnel
- Elected officials
- Individuals appointed to fill vacancies in elected offices
- Individuals employed by a farmer, family farm, or family farm corporation who work for 28 days or less per year
Base Rate
- Hourly Paid Employees:
- Employees will be paid at their regular hourly rate during the duration of the leave.
- If an employee has multiple hourly rates (perhaps due to different job roles or duties), they will be paid based on the rate applicable to the period of their leave.
- Salary Employees:
- Employees will be paid the same rate they would have been if they were working and not using ESST. This means their salary remains unaffected using ESST.
- Commission-Based Employees:
- Employees will be paid the local, state, or federal minimum wage for the duration of their ESST, whichever rate is greater.
Bereavement Leave
ESST is now allowing hours to be used for helping and attending funerals or memorials. As well as using hours for tending to financial or legal matters after the death of a family member.
Weather and Public Emergencies. Firefighters, licensed peace officers, 911 dispatchers, correctional facility guards, and public employees with commercial driver’s licenses are not allowed to use their ESST hours for events relating to weather, closure of an employee’s workplace, or family member’s school. Only under certain circumstances are they allowed to.
Thank you for your attention to these important matters. These laws and regulation updates are subject to change. The information presented here reflects our current understanding at the time of post. For additional information and inquiries, please contact us. We are here to provide assistance!
