PFML provides job protections and partial wage replacement (paid by the state) to qualifying employees under certain circumstances. Virtually all employers are required to participate in the program.
Employers must set up a Paid Leave Administrator account and designate a Paid Leave Administrator through whom communications between the state and the employer will be made.
The first wage detail reports for PFML are due October 31, 2025. Most employers will not have to do anything additional to comply with this first report as the existing unemployment insurance system quarterly wage detail reports will be used. If all of an employer’s employees are covered by unemployment insurance, the employer’s existing unemployment insurance account has already been converted to a joint unemployment insurance and paid leave account, and their quarterly wage detail reports will be used for both unemployment insurance and paid leave. If all employees are not covered by unemployment insurance, employers will need to set up a Paid Leave Only account through the unemployment insurance online system. Those employers will submit two separate wage detail reports each quarter-one for employees covered by unemployment insurance and Paid Leave through their joint account, and one for employees covered by Paid Leave Only.
Election of Private Program
Employers can participate in approved private programs which offer equivalent benefits to PFML. Equivalent plans must be purchased from an approved insurance carrier, or an employer could self-insure. A self-insured plan requires a surety bond in the amount of one year’s worth of premiums. If an employer fails to meet its obligations and its workers return to the state plan, the bond is paid to Minnesota Paid Leave.
The request for an Equivalent Plan Substitution must be made through the Paid Leave Administrator account. Equivalent plans can take effect at the start of any quarter, but employers who want their plan in place before the program launches on January 1, 2026 should submit their request by November 10, 2025.
Premium
The premium rate for 2026 is .88% of the employee’s wages (up to the Social Security cap) and can be split between the employer and employee. This premium rate can be adjusted yearly, based on how the program is running.
Employers must contribute a minimum of 50% of the total premium but can contribute the entire amount. Employers can require employees to contribute not more than 50% of the total premium through payroll deduction. However, this deduction cannot bring the employee below their applicable minimum wage. This may require employers to cover more than half of the premium.
Premium deductions from employee paychecks begin January 1, 2026. Employer quarterly payments to the fund begin April 1, 2026.
Qualifying length and reasons for leave
Length: Unless used for bonding with a child, the period for which the employee requests leave must be at least 7 days to qualify
Reasons:
The law provides for
- up to 12 weeks of medical leave for the employee’s own serious health condition and
- up to 12 weeks of leave for bonding with a newborn or recently placed child, safety leave to deal with domestic violence, caring for a family member who has a serious health condition or military exigency.
Employees can take both types of leave in a 12-month period but cannot exceed 20 weeks. Use of other leave entitlement or PTO
Employers can ensure that leave entitlements under other statutes such as FMLA and Minnesota Parental Leave, run concurrently by making sure their existing leave policies specifically state that such leaves run concurrently with PFML.
Employees may also use vacation pay, sick pay, or ESST in lieu of Paid Leave benefits if the employee is concurrently eligible for such leave. The protections of the PFML apply to this time off as well.
Employers can allow, but not require, employees to exhaust ESST, vacation or PTO while taking PFML. Employers can also allow – but not require – employees to supplement their PFML with their PTO or ESST.
Total pay cannot exceed the employee’s normal salary.
What employers should do now:
Give notice to employees by December 1, 2025, including their rights under the law, what, if any, premium percentage will be deducted from their pay, where to give notice of leave and policy changes. You must also provide proof that you provided this notice.
Determine whether they want to purchase an equivalent private plan. This election must be made with the state by November 10, 2025 if employers want it applicable for 2026.
Set up a Paid Leave Administrator Account and designate a Paid Leave Administrator – you can and should have more than one person designated!
Determine if you want to split the premiums with employees and if so, in what amount. Remember – any employee contribution cannot bring them below their applicable minimum wage.
Work with your payroll provider and/or IT department to ensure deductions are appropriately reflected on paystubs and appropriately paid to the employer state account.
Review and revise your leave policies to ensure leave entitlements run concurrently and employees are directed to the appropriate personnel to whom to give notice of leave.