On June 16, 2025, the Minnesota Department of Employment and Economic Development (DEED) adopted expedited permanent rules implementing the state’s Paid Family and Medical Leave (PFML) program. These rules clarify employer obligations and administrative requirements in preparation for the program’s January 1, 2026, effective date.
Key Highlights of the Final Rules
- Premium Contributions and Reporting Requirements. Beginning January 1, 2026, employers must begin remitting payroll premiums for the PFML program. The initial contribution rate is set at 0.88% of an employee’s taxable wages, with the rate subject to change annually (capped at 1.1%). Employers and employees may share the cost equally. Small employers (30 or fewer employees with average wages less than 150% of the state average) may be eligible for reduced premiums or state grants to offset administrative costs.
Quarterly wage detail reporting will be required starting with wages paid in the first quarter of 2026. Employers must submit their first reports by April 30, 2026. These reports will be submitted using the same online system used for Minnesota’s Unemployment Insurance program. - Notice and Posting Requirements. Employers must post a DEED-issued PFML notice in the workplace by December 1, 2025. In addition, employers must provide written notice to each employee explaining the benefits available under the PFML program, premium contributions, job protections, and how to apply for leave. Employers need to notify employees in their native language and hang a workplace poster in English and any language spoken by five or more employees. Minnesota Paid Leave will provide written materials in different languages that employers can use to meet this requirement.
- Private Plan Equivalency. Employers may apply to use a private plan that provides benefits equal to or greater than those under the state program. All private plans must be approved by DEED, and employers must still submit quarterly wage reports regardless of whether they operate under a public or private plan. Employee contributions for private plans must not exceed the cost of the public program.
Next Steps for Employers
To prepare for Minnesota’s PFML implementation, employers should:
- Update Payroll Systems: Ensure systems are configured to calculate and withhold premium contributions beginning January 1, 2026.
- Monitor Eligibility for Small Employer Relief: Assess whether your organization qualifies for reduced rates or administrative grants.
- Review and Distribute Required Notices: Post the required DEED workplace notice by December 1, 2025, and provide written notice to employees.
- Plan for Reporting Obligations: Confirm access to the Minnesota UI online system and be prepared for quarterly wage detail submissions.
- Evaluate Private Plan Options: If considering a private plan, begin evaluating options and prepare application materials for DEED approval.
