Minnesota Paid Leave

Minnesota has introduced a new Paid Family and Medical Leave (PFML) program that goes into effect on January 1st, 2026. This program will be funded by a 0.88% payroll tax, which is comprised of both employer and employee contributions.

Like PFML programs in other states, Minnesota employers will be prompted for new setup parameters for Minnesota PFML. These include whether:

1. They are a “qualified small employer” (and are therefore subject to a lower tax rate);

2. They have an equivalent private plan that exempts them from the state plan;

3. They wish to “pick up” employee contributions.

New tax parameters for Minnesota PFML will be released next week on Friday, December 19th, 2025. At that time, Minnesota employers should expect to have their onboard status move to a blocking status until they provide those necessary setup parameters.