The new Minnesota Paid Leave (MPL) law, which provides for paid family and medical leave for most employees in Minnesota, will significantly impact the employment landscape for Minnesota employers starting January 1, 2026. With broad coverage, up to 20 weeks of leave and paid benefits per leave year, and complex coordination requirements, employers should prepare now to ensure compliance.
Understanding Minnesota’s New Paid Leave Requirements
MPL is a comprehensive law that provides up to 20 weeks of paid leave per leave year for eligible employees. The law, which is effective January 1, 2026, covers qualifying personal medical leave and family leave, including bonding, caregiving, safety and military exigency events. Paid benefits will be administered by the Minnesota Department of Employment and Economic Development (DEED)’s new Paid Leave Division, with an option for employers to use a private equivalent plan if approved. Although paid benefits will be administered by DEED, employee rights under the new law will be enforced by the Minnesota Department of Labor and Industry (MNDOLI).
Key Details
- Effective Date: January 1, 2026.
- Coverage: All Minnesota employers, regardless of size, except the federal government and tribal entities.
- Eligibility: Most employees working or residing in Minnesota at least 50% of the year, provided they have earned 5.3% of the state’s average annual wage (about $3,700) in the past year.
- Leave Types: Up to 12 weeks for personal medical leave and 12 weeks for family leave, capped at 20 weeks total per leave and paid benefit year.
- Job Protection: Although employees are eligible for leave and paid benefits once they meet the eligibility factors, employees are eligible for job protection and reinstatement rights after 90 days of employment.
- Paid Benefits: Partial wage replacement is calculated based on how an employee’s wage compares to the state average wage.
- Benefit Funding: Premium of 0.88% of the employer’s payroll tax, evenly split between employer and employee unless an employer elects to cover more.
- Anti-Retaliation: Employers cannot interfere with or retaliate based on the exercise of MPL rights.
- Administration: Through DEED or an approved private equivalent plan.
Why This Is Important
The MPL law introduces new leave, wage reporting, premium payment, administrative and other compliance obligations for employers. It also expands Minnesota employee rights beyond federal FMLA – covering almost all employers and most employees, providing for paid leave benefits, and including broader definitions of covered family members and qualifying events. Employers must adjust policies and internal procedures to align with the law’s requirements.
MPL vs. FMLA: Key Differences for Employers
| Feature | MPL | Federal FMLA |
|---|---|---|
| Employer Coverage | All Minnesota employers, regardless of size (except federal government and tribal entities) | Employers with 50 employees |
| Employee Eligibility | No tenure requirement; earnings threshold applies | Must have worked 12 months for employer and 1,250 hours in the past year |
| Pay Available | Paid leave benefits | Unpaid |
| Covered Family Members | Broad definition: including siblings, grandparents, in-laws, domestic partners, and a number of others for caregiving relationships | Limited to spouse, parent and child |
| Medical Leave Qualification | Serious health condition must typically result in at least 7 days of incapacity | Requires 3 consecutive days of incapacity, continuing treatment by a healthcare provider, or inpatient care |
| Bonding Leave | May be taken intermittently | Must be taken in a continuous block unless employer approves otherwise |
| Benefit Year Calculation | Rolling forward year from first qualifying event under state plan; employer with approved private plan may select year | Employer-defined 12-month period |
| Post-Employment Eligibility | Up to 26 weeks under private plans | No post-employment coverage |
Steps Employers Must Take To Prepare
- Decide Between State or Private Equivalent Plan —Employers must choose whether to participate in the state-administered program or apply for approval to use an equivalent private plan. Requests for private plan substitution must be submitted to MN DEED no later than November 10, 2025, to prepare for January 1, 2026, effective date of the law.
- Apply for Small Employer Assistance —Small employers may be eligible for a reduced premium rate under MPL if they employ 30 or less employees and the average employee wage is less than 150% of the statewide average weekly wage. Applications for small employer assistance for 2026 must be submitted no later than November 15, 2025, to MN DEED
- Set Up Employer Accounts —All employers must create an MPL account with DEED, even if opting for a private plan. All employers must designate an MPL administrator to manage communications and documentation.
- Quarterly Wage Reporting —Employer obligations to submit quarterly wage reports to DEED started on October 1, 2024. Employers already submitting reports for unemployment insurance purposes can use those reports to comply with MPL wage reporting obligations.
- Prepare for Premium Payments —Quarterly premiums for the state plan begin April 30, 2026, covering the first quarter of the year. An employer can use DEED’s premium calculator to estimate costs.
- Update and Coordinate Leave Policies and Available Pay Benefits —Employers should create an MPL policy and revise other leave and paid time off policies to reflect MPL requirements and coordinate different leaves and types of available pay. MPL may run concurrently with FMLA, Minnesota Parental Leave, and Minnesota Earned Sick and Safe time leave where an absence falls under multiple laws. Employers may also elect to allow employees to supplement (e.g., “top off”) paid MPL benefits through paid time off banks or other voluntary paid leave benefits offered by an employer. Employers should also consult with their benefits and insurance providers to determine what, if any, impact MPL will have on preexisting disability benefit plans.
- Communicate with Employees —By December 1, 2025, employers must:
- Provide individualized written notice of MPL rights to employees and obtain signed acknowledgments of this notice.
- Post DEED’s required workplace poster.
- Include MPL details in employee handbooks (to be effective January 1, 2026).
- Educate Management and HR Teams —Employers should train HR teams and members of management who will be on the front line fielding time-off requests or answering MPL-related questions, to ensure the correct information is provided.
For questions regarding the new Minnesota MPL law, including help with drafting your MPL policy or coordinating MPL with other policies and paid time-off programs, please contact Caitlin Gehlen or Megan Anderson, or your regular Lathrop GPM attorney.