‘We must do something’: Paid leave program back before Minnesota lawmakers ahead of 2026 launch

Minnesota’s paid family and medical leave program is in the crosshairs even before it even gets off the ground and is shaping up as one of the legislative session’s big bargaining chips.

Later this spring, a Minnesota agency will ramp up training and other outreach for a paid leave program geared toward new parents and other caregivers. That’s assuming GOP lawmakers don’t succeed in efforts to delay it or significantly change who qualifies for the benefits.

Evan Rowe, deputy commissioner of the Department of Employment and Economic Development, has helped oversee the program’s buildout. He said there is work to do in the coming months to raise awareness. But he doesn’t expect any hiccups.

“We are already well underway in terms of coding and having the technical tools in place that'll ensure that we have a really robust system that operates with a high level of integrity, and one that's really easy for Minnesotans to use,” Rowe said. “This is going to be, I think, a really simple, mobile, responsive, accessible system that Minnesotans will be able to look forward to in January 2026.”

At the Capitol, Republicans will have a stronger presence in end-of-session negotiations than they've had for a few years and they're intent on making the leave program part of those discussions. They’re pushing bills that range from postponing the 2026 rollout to scrapping the program entirely.

At stake are a set of new benefits expected to produce hundreds of thousands of claims per year when working parents have or adopt children, when they need extended time off for a serious illness or when they serve as a caretaker to an ailing relative.

They’ll qualify for partial wage replacement, topping out at $1,372 per week depending on their normal salary.

Minnesota is the 13th state to implement an expansive paid leave program.

School districts, small business owners and several interest groups have sought to temper the program or eliminate it altogether. Meanwhile, other business owners, faith groups and Minnesotans that can’t access this kind of benefit now are pushing state leaders to stay the course.

State Rep. Dave Baker, chair of the House Workforce, Labor and Economic Development Finance and Policy Committee, is leading the effort to revisit the 2023 law that set up a paid leave program in Minnesota. He said he worries that paid leave will be a costly burden, that the state won’t be able to deliver the benefits and, simply, that it’s not ready to go. He wants to pump the brakes. 

“The DFL built this, is still building this big, big car, and the roads to getting to the employees, and the employers are not well developed at this point. They're gravel. There's a lot of potholes,” Baker, R-Willmar, said. “We have a lot of concerns. And the worst thing we could do for families is to launch a bill that's not ready.”

If he can’t delay it, Baker said he hopes to carve out groups of workers who would be exempt from the requirements.

Under the program, the state guarantees leave of up to 12 weeks to bond with a new child or 12 weeks to deal with a long-term illness. There’s a 20-week cap if an employee accesses both in a calendar year. A person can expect to get their job back when they’re ready to return.

In a narrowly divided Legislature, any change would need bipartisan backing to pass. Baker said House Republicans will use leverage they have in budget negotiations to push for changes.

“We must do something,” Baker said, insisting the law as it now stands “will not work for Minnesotans.”

During a run of solo GOP House control, Baker has presided over committee meetings where testifiers have come in to vent frustrations over the program not even fully in place yet.

“Our biggest issue and question is how do we pay for the paid leave benefit?” Kim Lewis, with the Minnesota School Boards Association, told Baker’s committee last month.

She said schools are already laying off staff to make their budgets. Districts will have to find money to cover a new tax for paid family and medical leave, Lewis said.

Steve Gilbertson, with Minneapolis manufacturer Electramatic, Inc., echoed the concerns and urged lawmakers to wait to put the program in place.

This should absolutely be postponed by 2027 to give businesses time to figure out how they’re going to deal with this,” Gilbertson said.

So far, the efforts to reopen a signature accomplishment of Gov. Tim Walz and Democratic allies have met firm opposition from DFLers.  Walz said he doesn’t want to put off the launch; legislative DFLers said they’ll work to keep it on track, too.

“We're open to conversation about anything but, but I will say that this is a program that Minnesotans have been waiting for for years and years and went through many, many, many, many committee hearings,” said Rep. Dave Pinto, the top Democrat on the workforce and labor committee. 

“I am not aware of any changes that would be needed for the program,” Pinto continued. “This is a program that's ready to go.” 

Senate Majority Leader Erin Murphy, DFL-St. Paul, said the way to ensure the program launches without a hitch is to avoid last-minute changes.

“The best way we avoid hiccups is not tweaking or changing the law in this session,” Murphy said.

Lawmakers earmarked nearly $668 million in 2023 in initial funding for the account and $122 million to provide for its creation and administration. Starting next year, a new payroll tax kicks in to pay for the state-managed benefit. It would apply to employers who don’t offer comparable benefits now and workers would also pay a portion, too. 

Initially, that payroll tax will be 0.88 percent split between employers and workers. There are accommodations for smaller employers as well as a maximum employee contribution of $14.90 per week.

Officials estimate that as $1.4 billion in benefits could be accessed per year at the outset. The benefits would provide partial pay replacement when a worker is on leave, with those with lower salaries getting more replacement than those with higher salaries. 

The most that someone could expect to receive each week is 90 percent of their usual pay, up to that cap of $1,372.

When the bill was under consideration in 2023, DEED estimated that around 204,000 people would draw on benefits from the program each year.

House DFL Leader Melissa Hortman, of Brooklyn Park, said DEED has a strong track record administering unemployment insurance and other benefits.

“They have this down to a science. So we feel a lot of confidence because of their performance in the (unemployment insurance) space that their performance in the paid family medical space will be top notch compared to other states,” she said.

Some are banking on it. 

Jessica Peterson White, who runs Content Bookstore in Northfield, said it would help her compete with bigger businesses that can afford to offer their own paid-leave benefit and use it as a hiring incentive.

“I provide great jobs with good benefits, and many of my younger employees would like to keep working for me and have kids,” Peterson White said. “But without a paid family and medical leave program, they're likely to leave us when it's time for them to start a family.”

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