Minnesota prepares for new paid leave law

In less than 100 days, Minnesota's new paid leave law takes effect.

Labor and business groups are getting the word out so that employers and employees are prepared. The law was approved in 2023, with ongoing implementation efforts since then. Starting Jan. 1, 2026, most workers can apply for up to 12 weeks of medical leave, or 12 weeks of family leave.

It's managed by the state, with a payroll tax evenly split between the employer and employee to cover partial wage replacements for time off.

Maureen Dunaway, representative of the Minnesota Association of Professional Employees says like unemployment insurance, these new guarantees will serve as a bridge during major life events.

"An economy does better when the people that have to participate in that economy have the ability to keep it sustained," she explained. "And, you know, that financial security reduces stress."

Dunaway, also an analyst for Minnesota's unemployment system, predicts strong management of paid leave. MAPE is putting out consistent messaging to its members so they know about qualifying events and other details. Organizations and law firms representing businesses are busy with tutorials about compliance and key deadlines. While the law is celebrated for improving worker stability, skeptics worry about administrative burdens for small firms.

Lauryn Schothorst, director of workplace management and workforce development policy with the Minnesota Chamber of Commerce, said they recognize the importance of paid leave, but still prefer private sector solutions, and added that the pending changes follow several other new employment laws, putting extra pressure on smaller businesses focused on scaling up.

"And so, it's been a real big compliance challenge across the board," she explained. "This is another one — it's one of the final ones over the past three years, and we want to make sure businesses recognize it's going into effect, and how close they are to that deadline."

Mary Ellen Reihsen, attorney and partner, Hellmuth & Johnson, is creating awareness with her law firm's clients while taking on other outreach initiatives regarding paid leave. She was in Washington State when a similar model was implemented, and said there were some bumps in the beginning but feels it's fair to say it proved to be worthwhile. She thinks the same outcome will unfold in Minnesota.

"I think ultimately, a happier, healthier workforce is gonna make a state more profitable," she contended.