DEED outlines paid‑leave implementation milestones; premiums, employer notices and small‑business assistance scheduled before 2026 launch

The Department of Employment and Economic Development (DEED) told the House Workforce, Labor, and Economic Development Finance and Policy Committee it is on track to implement Minnesota’s paid family and medical leave program, with benefits and payroll deductions scheduled to begin Jan. 1, 2026.

"The paid leave law enacted in May 2023 and updated in May 2024 makes paid family and medical leave coverage available to Minnesota workers beginning 01/01/2026," Deputy Commissioner Evan Roehm told the committee, laying out the program’s core provisions and eligibility rules.

Greg Norfleet, the paid‑leave program director, described recent implementation milestones. "We launched wage detail reporting successfully in October of this last year, and we're already collecting wage detail information for over 160,000 employers across the state," Norfleet said. The wage data will be used to calculate eligibility and benefit amounts; DEED plans to use the state’s unemployment insurance (UI) online system to collect premiums when payroll deductions start.

Norfleet and Roehm walked members through major dates and program features that staff and employers must consider:

- Employer notifications: By statute, employers must notify employees of pending premium deductions 30 days after hire or 30 days before premiums begin; DEED listed Dec. 1, 2025, as the practical notification deadline for existing employees.

- Premiums and benefit start: Premium deductions will begin Jan. 1, 2026; the first quarterly premium payment is due April 30, 2026.

- Benefit structure: Workers can receive up to 90 percent of usual wages, capped at $1,372 per week under current statewide averages; lower‑wage workers receive a higher replacement percentage. A combined maximum of 20 weeks is available in a 12‑month period when medical and family leave overlap.

- Wage‑eligibility threshold: DEED said applicants must have earned at least 5.3 percent of the statewide average annual wage in the prior year to qualify (the transcript cited a 2024 figure of $3,781 as the threshold).

- Equivalent plans: Employers can apply for private or self‑insured equivalent plans; DEED and the Department of Commerce plan to pre‑approve private plans and open an employer application portal for equivalent plans in early spring.

- Small‑employer assistance: Starting Jan. 1, 2026, small employers that meet statutory criteria may apply for funds to hire temporary workers or increase existing worker pay, with DEED noting eligibility for up to $3,000 per approved leave.

DEED described product development and program‑integrity work: vendor selection (Nava PBC), accessibility and testing plans, internal controls, fraud risk assessments, and an independent audit plan for the benefits‑payment system. The department showed an early, mobile‑friendly version of the online bonding application and said testing and user research will continue.

Committee members raised operational questions about employer notification timing, the timeline to adjudicate equivalent‑plan applications, how paid‑leave benefits will be coordinated with UI and employer supplemental payments (ESST), and staffing plans. DEED responded that pre‑approved private plans from carriers should be processable in a matter of days, while self‑insured plans would require additional documentation and surety and that guidance on ESST interaction is still under development.

DEED officials told the panel they have hired roughly 60 full‑time equivalent staff and use vendor staff for additional capacity; the department’s hiring target is about 400 FTEs, with large operational classes planned in spring, summer and fall 2025 to staff contact centers and claims adjudication. DEED also reported it has handled more than 1,200 direct public inquiries through its website and hosted more than 150 engagement sessions statewide.

Several members urged DEED to accelerate and publish employer communications and materials so collective‑bargaining parties and small employers can plan for pay‑stub changes beginning Jan. 1. The department said outreach materials are in development and that employers may notify employees earlier than the statutory minimum.

DEED closed by encouraging employers and social‑service organizations to use paidleave.mn.gov for FAQs, to sign up for updates, and to apply for community‑outreach grants that open in July 2025.