Deadlines approaching for the for the Paid Family and Medical Leave mandate

By Doug Loon
President and CEO
Minnesota Chamber of Commerce

It's been a busy week at the Chamber as I’ve been spending part of it with our members, particularly our Leadership Minnesota class here in the metro. We’ve been out visiting businesses and enjoying a little bit of the nice fall weather.

I’m back with you to talk about the Paid Family and Medical Leave law that takes effect in just a few weeks, starting January 1, 2026. PFML, as it’s known, will affect every employer and employee, and they’ll be required to take part in this new state-run benefits system. If you haven't yet, be sure to visit our employer-focused PFML toolkit for resources. 

Employers already do a lot to support their workers, offering flexibility, paid time off, rich benefits whenever it fits their industry and the profile of their business. But this one-size-fits-all state mandate adds layers of bureaucracy and costs, especially for small businesses. And we’re hearing from our members all along the way as we prepare for the January 1 start of this new program.

The November 15 deadline to apply for a private plan is basically here. By the time you’re hearing this, it will have just passed. We’ve been talking about this deadline for months, and the big decision for employers was whether or not to be in the state program or substitute it with a private plan.

That means a lot of employers and their employees will be in the state system at least until April, when the next window will open for applications for a private plan. So for now, if you didn’t pursue a private plan, you’re in the state-run program. And to comply, every employer will need to set up two new accounts with DEED, the Department of Employment and Economic Development, the state agency identified in the statute to administer this new program. It will be paid for through a new payroll tax.

One system you’ll need to set up is how to pay that payroll tax, and another will be how you manage your leave requests from your employees. For small businesses, that’s one more complicated system to learn and keep up with.

Employers also have to walk employees through what this whole program means. Leave for them will now go through a state agency instead of through management or your HR department. They’ll receive partial pay when taking that leave, and their paychecks will shrink a bit because of the new payroll tax.

And remember, this all comes right after the Earned Sick and Safe Time law that took effect in 2024. Now, we have two statewide systems going on simultaneously starting January 1, and both add costs, confusion and of course paperwork for employers.

The Minnesota Chamber is working to try to make reforms to the system, but also to keep businesses aware of the compliance requirements of these new laws. Your business voice has been heard, and we would like to continue making progress in helping the system run smoothly and making reforms along the way.

We are urging regulators and lawmakers to provide clarity and flexibility as this program rolls out, and we’re encouraging employers to stay informed, ask questions, and share what’s working and what’s not.

So, stay tuned. We’ll continue this conversation, knowing these deadlines are upon us. We will be making important adjustments as we go forward. And we thank you for all your diligence as employers in our great state.

Thank you for listening to this week's podcast. I hope you have an enjoyable fall weekend, and we look forward to catching up with you on next week’s Minnesota Business Podcast!