Minnesota Paid Leave Law to Take Effect on January 1, 2026

Minnesota’s new Paid Leave Law will officially take effect on January 1, 2026, bringing significant changes to how employers manage family and medical leave within the state. The law applies to nearly all employers in Minnesota and covers most employees who perform at least 50% of their work within the state during a benefit year.

The new requirements include mandatory paid leave benefits, premium contributions, expanded employee protections, and employee notification obligations. Employers should begin preparing now to ensure a smooth and compliant transition.

If you or your business need support understanding the Minnesota Paid Leave Law, updating workplace policies, budgeting for new requirements, or developing an Equivalent Private Plan, our legal team is here to assist. Contact us at contact@consultils.com for professional and practical guidance tailored to your business needs.

Core Provisions

• Expanded Coverage: The law covers employers of all sizes across Minnesota. Employees qualify if they work at least 50% of their total hours in Minnesota over a benefit year, regardless of full-time or part-time status.

• Up to 20 Weeks of Paid Leave Annually: Eligible employees may receive up to 20 total weeks of paid family and medical leave each year, including:

  • Up to 12 weeks of paid medical leave for the employee’s own serious health condition

  • Up to 12 weeks of paid family leave to care for a new child or a family member

  • Combined leave may not exceed 20 weeks in a benefit year

• Required Premium Contributions: Employers must contribute premiums totaling 0.88% of employee wages starting in 2026.

  • Premiums may be shared between employer and employee, or the employer may choose to pay the full amount.

  • Employers may participate in the state-administered plan or apply for an approved Equivalent Private Plan that meets or exceeds statutory requirements.

• Mandatory Employee Notice by December 1, 2025: Employers must provide written notice to employees no later than December 1, 2025, informing them of their rights, benefit eligibility, and procedures under the new law.

Impact on Employers

• Administrative Changes: HR teams must redesign leave workflows, track employee eligibility, and manage documentation for leave requests under the new system.

• Increased Payroll and Budget Considerations: The required premium contribution will increase labor costs for many businesses. Companies with higher payrolls or larger workforces may see notable financial impact.

• Compliance Risks: Failing to provide proper leave, retaliating against employees who request leave, or missing required notices may result in penalties or enforcement actions.

• Preparation for Private Plan Approval (If Applicable): Companies opting out of the state plan must design their private plan, secure insurance coverage if needed, and complete the state’s approval process ahead of 2026.

  
  

What Employers Should Do

• Conduct a policy audit: Review all existing sick leave, family leave, parental leave, and medical leave policies to identify inconsistencies with the new requirements. Begin planning updates to avoid conflicts once the new law takes effect.

• Evaluate whether to join the state plan or apply for an Equivalent Private Plan: Assess which option best fits your organization’s size, budget, administrative capacity, and current benefits structure. Employers choosing a private plan must plan ahead, gather documentation, and submit for state approval well before 2026.

• Prepare for premium cost budgeting: Calculate the projected cost of the 0.88% wage-based premium starting in 2026. Determine how the cost will be split between the employer and employees, and incorporate these expenses into financial and payroll planning.

• Update employee handbooks, HR procedures, and internal documentation: All handbooks, leave request procedures, forms, and internal guidance documents should be updated to reflect the new leave entitlements, eligibility rules, and application processes. Clear and consistent policy language helps prevent confusion and reduce compliance errors.

• Upgrade HR and payroll systems: Systems must be able to track Minnesota work-hour thresholds, available leave categories, annual leave balances up to 20 weeks, premium contributions and wage reporting, and If your organization uses external HR or payroll software, contact your provider to confirm they will support Minnesota’s new requirements.

• Train HR teams and managers: Provide training on employee rights under the law, how to handle leave requests, what documentation is permissible, how to avoid retaliation, and how to manage workflow disruptions during extended leave periods. Well-trained supervisors reduce legal risks and improve employee communication.

• Prepare employee communication plans: Because the law requires employee notices by December 1, 2025, employers should plan ahead for how to deliver clear, easy-to-understand communication—such as via email, onboarding packets, intranet posts, or all-staff meetings.

• Create a cross-functional compliance response team: Establish coordination between HR, payroll, legal counsel, and operations to handle policy updates, respond quickly to leave requests, and ensure the company remains compliant. A structured internal process improves efficiency and helps avoid inconsistencies or delays.

As Minnesota’s Paid Leave Law approaches implementation, employers must prepare early to avoid unexpected costs, administrative burdens, and compliance risks. Proactive planning reduces the likelihood of business disruptions, budget uncertainty, and employment disputes. By updating workplace policies, strengthening HR processes, training managers, and establishing an internal response framework, employers can not only ensure compliance but also improve workforce stability and overall operational efficiency.

If you or your business need support understanding the Minnesota Paid Leave Law, updating workplace policies, budgeting for new requirements, or developing an Equivalent Private Plan, our legal team is here to assist. Contact us at contact@consultils.com for professional and practical guidance tailored to your business needs.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

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As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949