Why Minnesota’s Paid Leave Law Matters to You
If you are a Georgia-based employer, you might see a headline about a new Minnesota law and keep scrolling. We get it — we are primarily a Georgia and Southeast employer too.
But recently our HR team, including Karen Moss and Amy Clark, JD, SPHR, sat down to work through a major change coming out of the Midwest, and we realized something important.
This isn't just a Minnesota issue.
If you have even one remote employee living in the Land of 10,000 Lakes, this law applies to you. And Minnesota is now the 13th state to enact a paid leave law — a trend that will eventually reach other states where you do business.
Here's the breakdown.
Update, September 2026
This post was written just before the program launched. Minnesota Paid Leave took effect on January 1, 2026 and is now running. The 2026 premium rates held at 0.88% for employers with more than 30 employees and 0.66% for small employers, on wages up to a $185,000 base; employers must pay at least half, and the first quarterly contributions were due April 30, 2026. If you have Minnesota staff and have not registered or begun withholding, that is now a live compliance gap rather than a deadline to plan for — start there.
What Is Happening
Effective January 1, 2026, Minnesota launches a state-run Paid Leave program.
The benefit. Eligible workers can take up to 12 weeks of paid time off for family or medical needs — a new child, serious illness, military deployment. In some cases that extends to 20 weeks total in a single year.
The funding. It's a state-run program, but the money comes from a new payroll tax.
The look-back. Uniquely, this law has a look-back provision. Parents who had a child in 2025 can qualify for leave in 2026 based on that event.
What It Costs You
Even though the state pays the employee during leave, the payroll tax starts before the benefits do.
Large employers (30+ employees): 0.88% of wages
Small employers (under 30): a reduced rate of 0.66%
Who pays it? You have options. Employers can cover the full amount or split it 50/50 with the employee.
On a $50,000 salary, the total is roughly $440 a year. Split, that's $220 from the company and $220 from the employee's paycheck.
Why This Is Tricky for Small Businesses
Beyond the tax, there's the administrative reality of coordinating this with what you already have.
Benefit coordination. If you offer short-term disability — which often pays 60% of wages — you need to work out how that interacts with the state payment.
Job protection. Like FMLA, you must restore the employee to the same or an equivalent position when they return.
Staffing gaps. If a key person, say your bookkeeper, takes 20 weeks, you have to cover that role. The good news: small businesses under 30 employees can apply for a grant of up to $3,000 toward the cost of replacement staff.
What to Do Now
If you have remote staff in Minnesota, you cannot wait to think about this.
Check your roster. Confirm whether any employees physically work from Minnesota, even from a home office. They likely qualify.
Notify your team. The law requires you to inform employees about the program before January 1. You may need a signed acknowledgement.
Review your handbook. Update your PTO and disability policies so they don't conflict with the state mandate.
Train your managers. They need to know that if an employee mentions a sick parent or a new baby, HR gets flagged immediately so the right leave process starts.
The Bottom Line
We know this feels like a lot, especially for a law in a different time zone. But as remote work becomes normal, staying compliant means watching laws across the country, not just your own.
HR law is evolving quickly. If the "what ifs" of multi-state compliance feel overwhelming, you don't have to work it out alone. Grab a free 30-minute session with one of our HR experts.