Paid Family and Medical Leave (PFML)

A state-administered Paid Family and Medical Leave (PFML) program would allow nonprofits to be competitive employers, all Minnesotans to take time off to care for themselves and their families, boost the economy, and advance racial equity.

The current PFML bill working its way through Minnesota's legislative process (SF2 / HF2) is a social insurance model built on extensive research and is similar to highly successful models that have passed in 11 other states plus Washington, DC, as well as many countries. (CA, CO, NJ, MD, RI, NY, WA, MA, OR, CT, CO)

PFML is not only a common-sense solution but also extremely popular, with 80 percent of voters supporting it across party lines. The popular common sense bill has passed through over 10 committee hearings in the 2023 legislative session. It passed in the MN Senate in 2016 and the MN House in 2019 and 2020.

How does PFML work?

PFML would provide job protections for all workers. Current access to paid time off is not evenly distributed, with significant disparities based on race, income, geography, and employer size in MN.

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Current legislation would provide up to 12 weeks per year for leave with a serious health condition, including pregnancy, and up to 12 weeks per year for leave associated with care of a family member.

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PFML would keep costs low for all by creating a large statewide risk pool and equally sharing costs between employers and employees, both contributing 35 cents per $100 of employee earnings. For a worker earning $1,000 a week, this would equal $3.50.

Paid Family and Medical Leave FAQ

As the bill is currently written (SF2 / HF2), PFML is a new social insurance program administered by the Department of Employment and Economic Development (DEED) that would provide a partial wage replacement benefit and a leave entitlement for workers who are unable to work because they have a serious medical condition, they are taking care of a family member with serious medical condition, they are bonding with a new child, or they have a family member in the military being deployed. 

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, employees may be eligible for up to 12 weeks of medical leave and 12 weeks of family leave in a given year. However, they can only take leave for the duration for which they are eligible under the program requirements. In other states, employees typically take six to eight weeks depending on the type of leave.

Employees usually only take more than 12 weeks if they need medical leave because of a pregnancy complication followed by bonding leave. Because the benefit is a partial wage replacement, employees are incentivized to return to work as soon as they are able. 

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, PFML is paid for by a 0.7 percent payroll premium that can be split between the employer and employee, or paid solely by the employer.
  • For an employee making $52,000 per year this amounts to $3.50 per week.
  • For a nonprofit organization with a $1 million payroll this amounts to just over $67 per week.

The payroll premium is paid to DEED and if a worker needs the leave, they apply to DEED who pays out the partial wage replacement benefit. The employer is only responsible for their portion of the payroll premium, the benefit itself is paid for by DEED. 

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, all workers are covered under the program, regardless of the size of their employer. Private employers, public sector employers, and nonprofit organizations are all covered under the program. Self-employed individuals may voluntarily participate in the program by opting in and paying a 0.35 percent premium.

Employees need to have earned $3,500 in the base period (the four most recent calendar quarters) to be eligible for leave under the program. 

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

Under the current proposal the program would begin July 1, 2025. The two year period is needed for DEED to build the requisite administrative infrastructure, and perform outreach to employers and employees to prepare them for the program. The premiums would also begin to be collected on a quarterly basis starting July 1, 2025.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

Employer-specific Paid Family and Medical Leave FAQ

As the bill is currently written, when an employee takes leave on behalf of PFML, the organization has already contributed regularly towards their wage replacement, and the employer would not have to pay the employee during their leave. Because the employee would be receiving a percentage of their salary directly from the state, the employer would have the flexibility to hire temporary or contracted support, or use the funds already budgeted to pay the employee on leave to make critical business decisions.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, employers can provide their own comparable program by applying to DEED for a “private plan exemption.” This requires employers to cover all of their employees with a self-funded PFML plan that is equal to or better than the state program.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2

At this time, the bill does not have an exemption for small employers. The majority of nonprofits in Minnesota identify as “small” (75 percent of organizations have less than $1 million in revenue per year), and exempting them would increase the premium and decrease the partial wage replacement for all other participating organizations. Many nonprofit organizations struggle with offering market competitive benefits such as paid family leave; a state-administered PFML program would allow often cash-strapped employers to plan ahead and offer that benefit at a low cost to both the employer and to employees.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, no.

Self-employed individuals would be able to voluntarily participate in the program by opting in and paying a 0.35 percent premium. 

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, much like the unemployment insurance program, employers would need to share wage detail with DEED so they can determine benefit levels for individual workers. The same information is already currently shared with DEED by nonprofit organizations regardless of whether or not they are reimbursing employers.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, organizations would pay premiums quarterly to the state’s Department of Employment and Economic Development. It is a similar system to the state’s Unemployment Insurance program where all employers are required to submit a quarterly wage detail to DEED. Each employer would have a new account established with DEED for the PFML program.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

No. As the bill is currently written, DEED will establish an account with each employer. The employer would pay premiums quarterly and will be paid into the family and medical benefit insurance account.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

Under the current proposal, the employee would need to give a 30 day notice to an employer for foreseeable leave and as soon as practicable for leave with less than 30 days notice. Bonding leave begins at the time chosen by the employee, but the leave must end within 12 months of the birth, adoption, or foster care placement of the child.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, the legislature has authority to appropriate additional funds for state agencies to do this. State agencies would have the option to build this cost into their grants awards (and now is a great time to start advocating for that!). Nonprofits would build this into their benefits budget when applying for state grants. The cost of PFML would be a predictable expense for employers.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, both the employee and employer would contribute 0.35 percent of employee earnings on a quarterly basis. Based on the statewide average weekly wage for one employee of $66,924, the employer would pay $58 per quarter ($234 annually) for this employee.  To put it into another perspective, a nonprofit with a $500,000 yearly budget for wages would pay $437 per quarter ($1,750 annually) for ALL eligible employees.

To find out how much your organization would contribute, you would multiply 0.0035 by the organization's annual budget for wages.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2

As the bill is currently written, yes. Small employers (50 or fewer employees) would be eligible for a grant from DEED to cover part of the costs of hiring a replacement employee ($3,000) or paying existing employees overtime ($1,000).

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

Currently, there is legislation in the Senate to cap the premium at 1.2 percent. The House version does not include a cap. The final premium cap amount will be finalized before the bill is voted on by the Minnesota Legislature.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, the total wage replacement would be capped at $1,287 per week for the highest earners. The employee's wage benefit is based on a progressive wage replacement at 55 percent - 90 percent (average of 66 percent) of an employee's salary, while also protecting job and healthcare benefits.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, the premium is set at 0.7 percent per employee regardless of salary.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, yes. An employer can choose to evenly split the amount of the entire premium with employee or contribute the full amount. However, employees cannot pay more than 50 percent of the premium.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, yes. An employer may pay the employee to ensure they have full wage paid while on leave.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

As the bill is currently written, yes. The bill has funds designated for program outreach, education, and technical assistance for employers, employees, and self-employed individuals.

Updated 3.13.23 with most recent policy proposal (SF2 / HF2)

Questions? We want to hear from you.

Ileana Mejia, Public Policy Advocate
imejia@minnesotanonprofits.org  |  651-757-3072