Frequently asked questions for employers

The first quarterly wage detail reports are due on October 31, 2024. These reports are submitted by employers and detail the wages paid to employees between July 1, 2024, and September 30, 2024.

Paid Leave is paid for by premiums on employee wages, split between the employer and employees. Employers can begin to deduct the employee share of the premium on January 1, 2026, when benefits become available. Employers will pay the first premiums to the State of Minnesota's Department of Employment and Economic Development by April 30, 2026. First premiums will be based on wages paid from January 1, 2026 to March 31, 2026.

Every quarter, employers are required to submit a report to the state that details wages paid to their employees. After benefits begin in 2026, this information will determine the premiums paid by employers and employees, and the eligibility and benefit amount for individuals under Paid Leave.

To make things easier for employers, the Paid Leave division will use the existing Unemployment Insurance (UI) system to collect quarterly wage detail reports for Paid Leave. If all of an employer's employees are covered by UI, that employer will not need to take any new action – their Employer Account has already been converted to a joint UI and Paid Leave account, and their quarterly wage detail reports will now serve both UI and Paid Leave.

For organizations with employees who are not covered by the Unemployment Insurance program, employers will need to set up a Paid Leave Only account through the UI website. Employers can register for a Paid Leave Only account on the Minnesota Unemployment Insurance website. Additional technical assistance is available from experienced UI staff for account setup.

For more information on wage detail data formats, and submission methods, please visit the Minnesota Unemployment Insurance website.

The first Paid Leave Only wage detail report will be for wages paid from July 1, 2024, through September 30, 2024. This wage detail report is due by October 31, 2024. Paid Leave Only employers will be able to report their wage detail for this period beginning on October 1, 2024.

Some employers have some, but not all, of their employees covered by Unemployment Insurance.

For employees covered by both UI and Paid Leave, a joint UI and Paid Leave account has already been created for these employers. For other employees not covered by UI, employers will need to also need to create a Paid Leave Only account. Once these employers have both accounts created, they will submit a separate wage detail report each quarter: one for employees covered by UI and Paid Leave through their joint account, and one for employees covered by Paid Leave Only.

For more information and to register for a Paid Leave Only account visit the Unemployment Insurance Minnesota website.

The quarterly wage detail reports submitted for Paid Leave are identical to what employers already submit to UI today. More information on wage detail submission formats can be found on the Unemployment Insurance Minnesota website.

Paid Leave uses the same wage definition as the Unemployment Insurance (UI) program.

To make things easier for Minnesota employers, the wage detail reports for Paid Leave are the same as those for Unemployment Insurance (UI).

When reporting wage detail for employees not covered by UI, wages include all compensation for employment, including commission, bonuses, benefits payments, tips and gratuities, and most goods and services provided as compensation.

No, the first premiums are not due until April 30, 2026, after the program launches, based on wages paid between January 1, 2026 and March 31, 2026.

The first reports are due on October 31, 2024 based on wages paid between July 1, 2024, and September 30, 2024.

Employers will need to provide the first and last name, social security number, wages paid and hours worked for each employee. This is identical to information provided for Unemployment Insurance wage detail reports.

More information on data formats and submission methods for wage detail reporting can be found on the Unemployment Insurance Minnesota website.

Paid Leave is paid for by premiums on employee wages, split between the employer and employees. Employers can begin to deduct the employee share of the premium on January 1, 2026, when benefits become available. Employers will pay the first premiums to the State of Minnesota's Department of Employment and Economic Development by April 30, 2026. First premiums will be based on wages paid from January 1, 2026 to March 31, 2026.

When Paid Leave begins for Minnesotans in 2026, the premium rate will be 0.88 percent. The total Paid Leave premium rate includes both a Family Leave and a Medical Leave premium that can be split between employer and employee contributions.

The premium rate will be set each year, subject to a maximum set in state law, based on how the program is running and best budgeting practices to keep the fund at a healthy level. Learn more about Paid Leave premiums and estimate payments.

Starting in January 2026, employers will contribute a minimum of 50 percent of the total premium, though they may choose to pay up to 100 percent of the premium. Employers will be able to deduct the remainder from employee pay, up to a maximum 50 percent of the premium.

Employers must pay at least half of the premium for each employee. Premium deductions cannot cause an employee to make less than the required minimum wage under applicable law. This may require employers to cover more than half of the premium.

Yes, premiums are capped at the Old-Age, Survivors, and Disability Insurance (OASDI) limit. This is the same wage base used by the Social Security program.

No, the rate is set for all employers annually and is not adjusted based on employees' utilization of the program.

Small employers pay a reduced premium rate under Paid Leave if they employ 30 or fewer people and the average employee wage is less than 150% of the statewide average weekly wage. Learn more about Paid Leave premiums and estimate payments.

Paid Leave covers most employers in the state.

Paid Leave covers most Minnesota employers with one or more employees, with exceptions for employees of tribal nations or the federal government and self-employed individuals who choose to provide their own coverage for themselves.

Self-employed individuals and independent contractors are not covered by Paid Leave but can choose to opt in beginning in 2025.

All employers, regardless of size, are required to participate in Paid Leave unless they are specifically exempt from the law. There is no exclusion in the law for small employers.

Small businesses with 30 or fewer employees will be eligible for reduced premiums and may be eligible for small business assistance funding to hire temporary workers or to increase an existing worker's wages.

Paid Leave is a new program distinct from Unemployment Insurance (UI). The Paid Leave law does not exclude the same employers that are excluded from UI. For example, religious organizations, non-profits, and agricultural employers are all required to participate in Paid Leave.

Yes, municipalities and local government entities are required to participate in Paid Leave.

Yes, part-time employees are covered under the program.

It depends on where the work is performed. Remote workers are covered by Paid Leave if they work at least 50 percent of their time from a location in Minnesota. This includes employees who work from home in Minnesota or spend some time working in other states. However, remote workers are not covered by Paid Leave if they work more than 50 percent of their time in a different state.

If an employee does not work at least 50 percent of their time in any single state – for example, if they split their time equally between Minnesota and two other states – they are covered if they live in Minnesota.

Yes, Paid Leave and Unemployment Insurance (UI) have the same coverage requirements for where someone lives and works. That means if an employer pays Minnesota UI premiums for an employee, they should also pay Paid Leave premiums for that employee.

Yes. Employers can choose to provide paid leave benefits through an equivalent plan instead of through Minnesota Paid Leave. This plan must offer benefits that are as good or better than those provided by the state.

Minnesota Paid Leave provides two types of leave:

• Medical Leave, for an employee's own healthcare needs
• Family Leave, to care for others

An equivalent plan can cover both Family and Medical Leave, or only one leave type. Employers who offer an equivalent plan for only one type of leave must pay premiums and participate in Minnesota Paid Leave to provide coverage for the other leave type.

Yes. There are two kinds of equivalent plans. Equivalent plans can either be purchased from an insurance carrier, or an employer can self-insure and provide coverage to their employees themselves.

Equivalent plans must offer benefits that are as good or better than those provided by the state.

For example, the plan must offer at least as much time off as the state plan, provide equal or higher weekly payments, allow intermittent leave, and cost employers no more than they would pay under the state plan.

To learn more about the requirements for equivalent plans, visit our Equivalent Plans webpage.

Self-insured plans must be backed up by a surety bond. The surety bond is a sum of money equal to one year of premiums under the state plan. The bond makes sure employers will meet their obligations under Paid Leave. If an employer does not, and their workers return to the state plan, the bond will be paid to Minnesota Paid Leave.

Yes. Employers approved for an equivalent plan will not pay premiums to the state, but they will still have obligations under Minnesota Paid Leave. For example, these employers must still submit wage detail reports to the state each quarter and comply with requirements to notify employees about coverage.

Equivalent plans are approved by the Minnesota Department of Employment and Economic Development (DEED) in consultation with the Minnesota Department of Commerce.

The Department of Commerce works with DEED to certify insurance carrier plans that meet program requirements. This way, employers have a market of approved plans available if they decide to offer paid leave benefits through an equivalent plan. A list of carriers with approved plans can be found at Approved equivalent plans (PDF)

Certification of insurance carrier plans will be offered continuously. Insurance carriers who are interested in providing an equivalent plan can find guidance from the Department of Commerce.

Employers can request an Equivalent Plan Substitution through their Paid Leave Administrator account.

Visit our Employer Accounts webpage for more information. To learn more about how to request an Equivalent Plan Substitution, visit our Equivalent Plans webpage.

To request an Equivalent Plan Substitution, employers must pay a processing fee and a nonrefundable request fee. The request fee is based on the size of your business:

• $250 for employers with fewer than 50 employees
• $500 for employers with 50 to 499 employees
• $1,000 for employers with 500 or more employees

Employers can submit a request at any time, and they will be reviewed and approved on a rolling basis.

An equivalent plan can take effect at the start of any quarter. It is best to submit your request as soon as it is ready, ideally one quarter before you want the plan to take effect. This will allow time for the Paid Leave team to review your request and for you to provide any additional information or documentation that may be required. It will also ensure you have time to notify your employees.

If you want your plan to be in place when the program launches on January 1, 2026, you should submit your request by November 10, 2025.

Equivalent Plan Substitutions must be renewed annually, one year after the policy effective date. Employers will need to pay a fee to renew.

On January 15, 2025, the Internal Revenue Service (IRS) issued Revenue Ruling 2025-4, which explains how the federal government will approach income taxes for premiums and benefits received from a program like Minnesota Paid Leave. For questions or comments on the guidance, please contact the IRS as directed in the IRS guidance.

Minnesota follows federal law to determine when income is included or excluded from a taxpayer’s gross income. This means Minnesota will generally conform to the IRS conclusions about federal gross income.

When Minnesotans apply for Paid Leave, they will have the option to withhold state and federal taxes from their weekly benefit. If an employee chooses this option, Minnesota Paid Leave will withhold 5% for state taxes and 10% for federal taxes. These are reductions set in Minnesota statute, not by the IRS. Learn more information on Paid Leave and taxes.

Yes. Paid Leave benefit payments will be paid by the state to individuals under the program.

Yes. Employers will be able to designate certain paid benefits like Paid Time Off, vacation and sick time as "supplemental benefits," which will allow employees to choose to receive up to full salary continuation during their leave. The decision to offer supplemental benefits is completely up to the employer.

The Family and Medical Leave Act (FMLA) is a federal program administered by the US Department of Labor's Wage and Hour Division. FMLA entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage. Minnesota Paid Leave and FMLA leave may be taken concurrently, but the requirements are different.

Employers can require that leave taken under Paid Leave run concurrently with leave taken for the same purpose under FMLA.

No, Paid Leave does not replace the Minnesota Parental Leave Act (MPLA). However, employers may require that leave taken under Paid Leave run concurrently with leave taken for the same purpose under the MPLA.

No, these are two different programs. The Earned Sick and Safe Time program is administered by the Department of Labor and Industry and began on January 1, 2024. Sick and safe time is paid time off employers must provide to employees in Minnesota for certain uses.

A more detailed breakdown between the two programs.