Minnesota’s Paid Leave Division recently published final proposed rules (“Proposed Rules”) that, if adopted, will regulate the state’s Paid Leave Law. The Paid Leave Law establishes a benefit insurance program for paid family and medical leave for covered Minnesota employees and takes effect on January 1, 2026. The Proposed Rules reflect input from businesses, healthcare providers, and Minnesota workers. The public can submit comments on the final proposed rules until January 3, 2025. In tandem with the publication of the Proposed Rules the Paid Leave Division updated its website with important next steps for employers to follow, along with answers to the most frequent questions asked regarding Paid Leave.

Final Proposed Rules Fill Gaps in Minnesota’s Paid Leave Statute

Insight on interpretation. The Proposed Rules provide critical guidance on how the Paid Leave Division—the agency authorized to administer the Paid Leave Law—will interpret the statute. For example, the Proposed Rules explain how the Paid Leave Division will determine whether an employee is considered a “seasonal employee” and therefore not covered by the Paid Leave program. (Rule 3317.3000). The Proposed Rules emphasize that self-employed individuals and independent contractors must establish an online account through the Paid Leave Division (Rule 3317.4000, subpart 1). The Proposed Rules also outline how to calculate benefits for a covered individual taking intermittent leave (3317.4700).

Additional requirements. The Proposed Rules impose additional requirements on individuals and key stakeholders to receive benefits. For example, a covered individual must report to the commissioner any additional income received during leave covered by the Paid Leave Law (Rule 3317.4600, subpart 2). The Proposed Rules also create a roadmap for how a covered individual must (1) request an extension of their covered leave; (2) request a change to their intermittent leave schedule; (3) request to switch from intermittent to continuous leave; and (4) request to switch from continuous to intermittent leave (3317.4600, subpart 4-7).

The Proposed Rules impose certain qualifications that a professional must meet in order to certify an employee’s need for leave under the Paid Leave Law for safety reasons (“Safety Leave”). (3317.8000). The Proposed Rules require the professional who certified an applicant’s need for Safety Leave to maintain documentation verifying their credentials for certification and must be able to provide such documentation to the commissioner upon request. 

If an employee requests covered leave under the Paid Leave Law to care for a family member with a serious health condition, the Proposed Rules specify the information that employees must provide. (Rule 3317.6000) Notably, the Proposed Rules provide that when more than one applicant seeks leave to provide care for the same family member with a serious health condition, all applicants’ certifications must be completed by the same health care provider.

Private plans. With respect to employers opting to use a private plan administrator, the Paid Leave Division has not issued guidance on how it will process applications for private plans and has stated it is working with the Minnesota Department of Commerce to determine an approval process. The Proposed Rules explain that beginning in 2027, self-insured employers and private plan insurers must submit annual reports to the commissioner containing specific information outlined in the Rules, including total eligible claims, the percentage of and reasons for claims denied in the fiscal year, processing times for initial claims processing and final decisions, and the average weekly benefit amount paid for all claims by benefit category. (Rule 3317.5000). Employers will remain liable for premiums until a self-insured or private plan is approved and effective. (Rule 3317.5000, subpart 5). The Proposed Rules require employers opting for private plans to give employees notice of coverage under the private plan that meets requirements set out in the Rules. (Rule 3317.5100).

The Paid Leave Division Updates Frequently Asked Questions Guide to Complying with the Law

The Paid Leave Division updated its FAQ Guide for employers. The updated FAQ Guide explains that covered employers must report all wages paid to employees through online wage detail reports due to Minnesota’s Unemployment Insurance (“UI”) or Paid Leave Division each quarter. Because the Paid Leave Division will use the existing UI system to collect the quarterly wage detail reports, employers whose employees are covered by UI will not need to take any new action. Employers with employees who are not covered by the UI program will need to set up a Paid Leave Only account. The FAQ Guide explains that the Paid Leave law is distinct from the UI program, and some employers who are not required to participate in the UI program, like religious organizations, non-profits, and agricultural employers, are likely required to participate in the Paid Leave program.

The updated FAQ Guide specifies that wages include all compensation including commissions, bonuses, benefits payments, tips and gratuities, and goods and services. If a corporation is an S corporation for tax purposes, then the corporate’s “wage-taking shareholders are considered employees” so the shareholders’ wages must be reported on the wage detail reports. The updated FAQ Guide states that the first premium payments will be due to the State of Minnesota’s Department of Employment and Economic Development by April 30, 2026. The premium rate will be set on an annual basis and will not change based on the level of employees’ utilization of the program. Premiums will be capped at the Old-Age, Survivors, and Disability Insurance (OASDI) limit, which reflects the wage base used by Social Security.