Navigating Minnesota’s New Paid Leave Act: What Business Owners and HR Leaders Need to Complete Before December 1, 2025
Minnesota’s new Paid Leave Act is set to significantly change how businesses manage employee leave benefits starting January 1, 2026. As an HR consultant working closely with clients across industries, I’ve seen firsthand how crucial it is for employers to not only understand the law but to proactively prepare—especially with key deadlines fast approaching.
This legislation impacts nearly every employer in the state, and failing to comply could lead to costly missteps. Whether you choose to participate in the state-run plan or explore private-market options, the strategy you put in place before December will directly affect your employees, your cost structure, and your compliance standing.
Understanding Minnesota’s Paid Leave Act
At its core, the Paid Leave Act creates a new framework for providing family and medical leave benefits to employees through either a state-administered program or an approved private plan. Starting January 1, 2026, employers must provide coverage, and premiums will be shared between the company and its workforce—within defined limits.
Many business owners are surprised by the complexity of these decisions. The choice between enrolling in the state plan and pursuing a private alternative requires careful evaluation of both costs and administrative implications.
Choosing Private Market vs. State Plan
If you decide not to participate in the state plan, there are critical steps and rules you need to follow:
- Approved Plans Only: Your broker must secure a plan that is officially approved by the State of Minnesota. Securing this approval early is key to avoiding delays.
- Mandatory State Fee: Even with a private plan, the state requires a premium fee paid by the company.
- Registration Deadline: You must register your plan with the state by November 10, 2025 and pay the required fee.
- Premium Sharing Limits: Employers cannot pass more than 50% of the state-defined premium rate to employees.
- Example: A large employer rate is currently 0.88%, meaning a maximum of 0.44% can be passed to employees.
- A small employer (under 30 employees) rate is currently 0.66%. There is also a maximum of 0.44% that can be passed to employees.
Employee Communication Requirements
By December 1, 2025, every employee must be informed of:
- The plan they will receive (state or private).
- The exact premium costs they will incur starting in 2026.
I’ve helped clients start this process early, walking employees through what the deductions will mean for their annual paycheck. One client, for example, has already begun issuing personalized breakdowns so team members can budget effectively before January.
Helpful Tools and Calculators
You can use the State of Minnesota’s Premium Estimator to determine your company’s estimated premium rates: https://mn.gov/deed/paidleave/employers/premiums/
Trusted Resources
For better understanding and compliance support, explore:
If you’re still weighing your options or need hands-on guidance with registration, premium allocation, and employee communications, Elevate Results Consulting can help you navigate every step before the December deadline.