Minnesota Paid Family and Medical Leave: What All Employers Need To Know

Beginning January 1, 2026, all Minnesota employers, from small electrical shops to large contracting firms, will be required to participate in the state’s new Paid Family and Medical Leave (PFML) program.
This landmark law provides paid, job-protected leave to employees for major life events and applies to businesses of all sizes, not just large employers. Here’s what contractors need to know as implementation approaches.

Who Is Covered

PFML applies to all Minnesota employers, no matter how many employees you have. Eligibility for benefits is based on an employee’s earnings history in Minnesota, not their length of service with a specific company.

The State of Minnesota will manage all claims, payments, and approvals, similar to how unemployment insurance is administered.

What the Program Provides

PFML offers partial wage replacement and job protection for employees who need time off for:

  • Their own serious health condition
  • Bonding with a new child (birth, adoption, or foster placement)
  • Caring for a family member with a serious health condition
  • Safety leave (related to domestic violence, sexual assault, or stalking)
  • Qualifying military-related leave

Employees may take up to 12 weeks for their own condition and 12 weeks for family leave per benefit year, with a combined maximum of 20 weeks total.

How It’s Funded

PFML will be financed through a state insurance fund administered by the Minnesota Department of Employment and Economic Development (DEED).

  • The total premium rate is 0.88% of employee wages in 2026 (subject to annual adjustments).
  • Employers may split the cost 50/50 with employees, each contributing 0.44%.
  • Employers with fewer than 30 employees may qualify for reduced employer-share rates.

Premium collection begins January 1, 2026, and will be reported and remitted much like unemployment insurance. Important: This isn’t just a payroll tax, employees will also become eligible to take PFML leave starting January 1, 2026. A qualifying employee could apply for and begin receiving benefits as soon as the program launches.

How Benefits Are Paid

When a qualifying event occurs, employees apply directly through the State of Minnesota’s Paid Leave portal. Once approved:
  • The state pays between 55% and 90% of the employee’s average weekly wage, up to a cap (projected around $1,372 per week in 2026).
  • Payments come from the state, not the employer.
  • Employers may allow employees to use accrued PTO or vacation time to “top off” their state benefit and reach up to full pay—but this is optional.

Can Employers Offer a Private (Equivalent) Plan Instead?

Yes—but it’s important to understand what that means. Employers may apply to the State of Minnesota to offer an equivalent plan (sometimes called a private or substitute plan) in place of the state plan. However:
  • The plan must provide benefits that are at least equal to or greater than what the state plan offers.
    • That means the same amount of leave (up to 20 weeks) and the same level of wage replacement and job protection.
  • You cannot offer a private plan that provides less leave or weaker protections just because it’s private (it won’t get approved by the State).
  • The plan must be approved and renewed by the state, and employers must continue to meet all reporting, notice, and recordkeeping requirements.
  • Equivalent plans may be attractive to employers who want more control over administration, service levels, or payroll integration, but they don’t change the core employee rights under the law.
In short: A private plan can change how the benefit is delivered, not what the employee is entitled to receive.

Employer Responsibilities

Even if the state administers the benefits, employers have several key responsibilities:
  • Payroll Deductions: Begin withholding and remitting employee contributions.
  • Employee Notices: Provide written information to all employees about their PFML rights.
  • Job Protection: Reinstate employees to the same or an equivalent position after approved PFML leave.
  • Health Coverage: Maintain group health benefits under the same terms during leave.
  • Recordkeeping: Track wages and hours for reporting and eligibility purposes.

Setting Up Your PFML Employer Account

If you’re participating in the state-administered plan, you’ll need to set up an employer account in the State of Minnesota’s Paid Leave system.
  • Register for an Employer Account. Go to uimn.org to register for an account if you don’t already have one. Use this account to submit wage detail reports and Paid Leave premiums
  • Designate a Paid Leave Administrator in your Employer Account. This person will be the main contact at your organization with Minnesota Paid Leave.
  • Create a Paid Leave Administrator Account. Go to paidleave.mn.gov to create your account. You will need this account to review leave applications and view Paid Leave determinations.
Employers who don’t set up an account may miss critical notifications or deadlines.

How PFML Differs From FMLA and ESST

It’s easy to confuse PFML with other types of leave laws already in place, such as the federal Family and Medical Leave Act (FMLA) and Minnesota’s Earned Sick and Safe Time (ESST). While they share similar goals (allowing employees time away from work for health or family reasons) there are important distinctions: TABLE HERE In short:
  • FMLA provides unpaid job-protected leave for larger employers.
  • ESST covers short-term, routine absences (like a few hours or a day or two).
  • PFML covers extended, life event-related absences (weeks at a time). Applicable to all Minnesota employers, regardless of size.

What Employers Should Do in 2025

With the law taking effect in 2026, employers should start preparing now:
  • Understand the Requirements. Visit mn.gov/deed/paidleave for official resources, timelines, and FAQs.
  • Estimate Costs. Budget for your 0.44% employer premium share (based on total wages). Premium rate calculator
  • Review Policies. Update handbooks and leave policies to align with PFML.
  • Plan for Staffing. Identify how your team will handle workloads when employees take leave.
  • Communicate Early. Keep your employees informed and ready for the transition. Required posters and notices.

Key Takeaways

  • PFML starts January 1, 2026, and applies to all Minnesota employers.
  • The premium rate is 0.88% of wages (split between employer and employee).
  • Employers may offer a state-approved equivalent plan, but benefits must be equal to or better than the state plan.
  • Employees may receive up to 20 weeks of paid, job-protected leave each year.

Looking Ahead

This new program represents a major step in Minnesota’s workforce landscape, expanding paid leave access to every employee and requiring participation from every employer. The Electrical Association will continue monitoring updates from the Department of Employment and Economic Development and share practical guidance to help contractors stay compliant, prepared, and informed as 2026 approaches.

Helpful Links

Disclaimer: The Electrical Association provides this information as a general overview for educational purposes only. Details of Minnesota’s Paid Family and Medical Leave program are still being finalized by the state and may change before implementation. Employers should always verify current requirements directly with the State of Minnesota’s Paid Leave division at mn.gov/deed/paidleave.