Legislative Committees Review Implementation of Minnesota Paid Leave

The Minnesota Department of Employment and Economic Development shared that the program is stable, with applications and funding tracking with projections.

The rollout of Minnesota’s new paid leave program received legislative oversight in hearings before the Senate Jobs and Economic Development Committee and House Workforce, Labor, and Economic Development Finance and Policy Committee. The Department of Employment and Economic Development (DEED) provided an update on implementation since the program took effect Jan. 1, 2026.

By the numbers

Since the start of the year, DEED has received more than 47,000 applications, with roughly 20,000 approved. Of those, 45% were for bonding leave, 44% for medical leave, and 11% to care for a family member.

The average duration of leave has been 8.7 weeks for bonding, 6.6 weeks for medical leave, and  5.9 weeks for caregiving. Each is below the 12-week maximum amount allowed for a single qualified event.

DEED said the most common reason for denying an application was that the employee applied through the state-run program while their employer offers a private plan.

Premiums, payments, and grants

Minnesota Paid Leave is funded through insurance premiums on taxable wages, currently set at .88% of wages and split between employers and employees. DEED estimates the premiums will generate about $1.3 billion annually, which is consistent with actuarial projections for operating the program.

The next benchmark will be on April 30, 2026, when the first premium payments are due.

DEED also reported that implementation costs came in nearly $70 million below earlier estimates. Under state law, those funds must be deposited into the program’s trust fund.

For cities with 30 or fewer employees, the program includes a standing appropriation of $5 million annually for Small Employer Assistance Grants. The grants are intended to help cover costs associated with hiring temporary workers, increasing hours or wages, or training staff while an employee is on leave. The grants are reimbursement-based, meaning employers may apply for these grants only after expenses have been incurred.

LMC staff take

During the 2025 legislative session, lawmakers proposed and debated numerous changes to the Minnesota Paid Leave program. This year, however, significant revisions to the law appear less likely.  

Legislators are expected to focus on priorities such as fraud prevention, gun law changes, and addressing immigration enforcement actions. Without a state budget to negotiate, as was the case last year, there is limited leverage to advance substantive changes to the law passed by the DFL majority during the 2023–2024 legislative session.

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