Paid Family and Medical Leave (PFML)

A state-administered Paid Family and Medical Leave (PFML) program was signed into law by Governor Walz in May 2023. PFML 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 new program 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) Minnesota is the twelfth state to pass a Paid Leave program. 

Paid Family and Medical Leave benefits and premiums will start for Minnesotans on January 1, 2026.

How does PFML work?

PFML will 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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The program provides up to 20 weeks per year for medical and family leave. Medical leave includes taking time to care for oneself with a serious health condition, including pregnancy, and family leave includes taking time to care for a loved one including bonding with a new child.

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PFML will 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

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. 

Employees are eligible for up to 20 weeks of medical leave and family leave each year. Employees are capped at 12 weeks for each leave meaning if an employee takes 12 weeks of medical leave, they will only be able to take 8 weeks of family leave and vice versa. However, they can only take leave for the duration for which they are eligible under the program requirements.

In other states, employees typically take 6-8 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. 

PFML is paid for by a 0.7% payroll premium that can be split between the employer and employee.

  • 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 when 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.

The final legislation includes all employees except for seasonal employees.

Seasonal employees include an individual who is not employed for more than 150 days in a 52-week period in the hospitality industry and the employer must:  

  • Make 2/3 revenues in 6 months of the year,  

  • Must apply to DEED to be seasonal  

  • Notify employee of seasonal status  


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 0.7% premium.  

The program will begin January 1, 2026. The two-and-a-half-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 January 1, 2026.

Employer-specific Paid Family and Medical Leave FAQ

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.

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 PFML plan that is equal to or better than the state program, including rights, protections, and benefits.

Employers with an approved private plan must pay a private plan approval and oversight fee upon initial application and any time the employer applies to amend the private plan. The fee is $250 for employers with fewer than 50 employees, $500 for employers 50 to 499 employees, and $1,000 for employers with 500 or more employees.  

The legislation does not have an exemption for small employers. Many nonprofits in Minnesota identify as “small” (75% 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.

The final legislation did not include an exemption for any sectors. Self-employed individuals would be able to voluntarily participate in the program by opting in and paying a 0.7% premium.

Much like the unemployment insurance program, employers will 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.

Organizations will 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 will have a new account established with DEED for the PFML program.  

DEED will establish an account with each employer. The employer will pay premiums quarterly and they will be paid into the family and medical benefit insurance account.  

The employee will 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. The employee can communicate the need for leave orally, telephone, or text message.  

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 grant awards (and now is a great time to start advocating for that!). Nonprofits can build this into their benefits budget when applying for state grants. The cost of PFML is a predictable expense for employers.  

Both the employee and employer will contribute 0.35% 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 * yearly budget for wages.  

Final legislation did include grants for eligible small businesses – however nonprofits are not included at this time. We will advocate next season to change that. 

Yes, the premium cap is 1.2%.

The premium is set at 0.7% per employee regardless of salary.  

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% of the premium. 

Yes, an employer may pay the employee to ensure they have full wage paid while on leave. 

Yes, the bill has funds designated for program outreach, education, and technical assistance for employers, employees, and self-employed individuals.  

Questions? We want to hear from you.

Ileana Mejia, Public Policy Advocate  |  651-757-3072