How to Manage a Minnesota Paid Family Leave

What Is Minnesota Paid Family and Medical Leave?

Minnesota’s Paid Family and Medical Leave program, often called PFML or MN Paid Leave, launched on January 1, 2026. It applies to nearly every employer in the state, regardless of size. That includes you, even if you have just one employee.

The program gives employees the right to take paid time off for qualifying reasons: recovering from a serious illness, welcoming a new child, caring for a sick family member, or dealing with a domestic violence situation. The state pays the benefits, not you. But you are responsible for setting things up, withholding the right amounts from paychecks, and managing the process when an employee needs to use it.

This guide walks you through what you need to do.

Which Employees Are Covered

Most Minnesota workers are covered, including full-time, part-time, temporary, and seasonal employees. The law applies to employees who work at least 50 percent of their time within Minnesota and have earned at least about $3,900 in the past year.

Employees can take up to 12 weeks of medical leave, up to 12 weeks of family leave, or up to 20 weeks if they need both in the same benefit year.

Who Pays for Minnesota Paid Leave?

The program is paid for through a payroll tax of 0.88 percent of employee wages, split between the employer and the employee. Employers must cover at least 50 percent, and can deduct up to 0.44 percent from employees’ paychecks.

If you have 30 or fewer employees and your average employee wage is below 150 percent of the statewide average weekly wage, your rate is reduced to 0.66 percent.

The state pays the actual leave benefits to employees. You are collecting and sending in contributions, not funding the benefits yourself.

Step-by-Step: How to Set Up Minnesota Paid Leave

Step 1: Set up your accounts.

You need two accounts: an Employer Account through Minnesota’s Unemployment Insurance system, and a Paid Leave Administrator Account at paidleave.mn.gov.

If all your employees are already covered by Minnesota’s Unemployment Insurance program, you do not need to do anything new to submit wage detail reports. Your existing account will work.

Step 2: Designate a Paid Leave Administrator.

This person is your main point of contact with Minnesota Paid Leave. They will use the Administrator Account to review leave applications and see state determinations. For most small businesses, this is you or your office manager.

Step 3: Post the required notice and notify your employees.

You must hang the state’s Paid Leave poster in a place where employees can easily see it, and you must notify each employee individually. Posters must be in English and any other language spoken by five or more workers.

You can download the poster from the Minnesota Paid Leave website. When you hire new employees going forward, you must notify them within 30 days of their start date. For any employees who were onboarded after the program went into effect, you can hand them a notice or email it, but be sure they acknowledge that they have received it and know who to contact with any questions.

Step 4: Update your payroll to start withholding.

Work with your payroll provider or software to add the PFML deduction. The employer portion is 0.305 percent and the employee portion is 0.135 percent for family leave; for medical leave, the employer rate is 0.135 percent and the employee rate is 0.305 percent. Your payroll provider should be able to set this up using your state rate.

Step 5: Pay premiums quarterly.

Your first quarterly premium payment is due April 30, 2026, based on wages paid from January 1 through March 31, 2026. After that, premiums are due quarterly through the same UI system you use for unemployment taxes.

Step 6: Decide a few policy questions now, before an employee asks.

Before someone requests leave, you need to know how you will handle a few things:

• Will you allow employees to use their accrued PTO or sick time to “top off” their state benefits and get closer to their full paycheck while on leave? If you allow supplemental payments, employees can choose to use vacation or sick time to make up the difference between their Paid Leave benefit and their regular wage. If you do not allow it, employees who want their full wage must use their accrued time instead of taking Paid Leave.
• How should employees notify you before applying? The state requires them to tell you first. Decide who they tell and how. Make sure your employees know your policy.
• What is the shortest block of time you will allow for intermittent leave? You can set this anywhere from one minute to one day.
• If you provide health insurance to your employees, any employee on Minnesota Paid Leave is still responsible for paying their insurance premiums. Decide how you will collect those premiums while the employee is on leave.

Write these decisions down and add them to your employee handbook.

When an Employee Requests Leave

Here is what happens when an employee comes to you saying they need to use this benefit:

1. The employee notifies you. Make sure you have told them who to contact and how.
2. The employee applies directly through the state’s portal at pl.mn.gov. They do not apply through you.
3. The state reviews the application and notifies you through your Administrator Account.
4. You log in to review the determination. You are not approving or denying the leave; the state does that. You are confirming the employee works for you and reviewing the outcome.
5. The employee receives payments directly from the state, not from you.
6. When the employee returns, you must reinstate them to the same position they held when their leave started, with equivalent pay and benefits, as long as they have worked for you for at least 90 days.

Common Mistakes to Avoid

Not posting the required notice. This is one of the easiest things to forget and one of the first things that gets flagged in an audit. Download the poster and put it up.

Thinking this only applies to full-time employees. It does not. Part-time and seasonal workers are covered, too, if they meet the earnings threshold.

Confusing this with Earned Sick and Safe Time (ESST). PFML is separate from Minnesota’s Earned Sick and Safe Time law. You still have to provide ESST even if you are participating in the state Paid Leave program. These are two different programs with two different purposes.

Waiting until an employee requests leave to figure out the process. That is the wrong time to be figuring out your policy on PTO top-offs and intermittent leave. Make those decisions now.

Assuming the state handles everything. The state pays benefits and manages eligibility, but you are still responsible for payroll withholding, quarterly reporting, employee notices, and getting the employee’s job back when they return.

What to Add to Your Employee Handbook

Your handbook should include a section on Minnesota Paid Family and Medical Leave that covers:

• Who is eligible and what qualifies as a reason for leave
• How employees should notify you before applying
• Whether you allow PTO or sick time to supplement leave pay
• Your policy on intermittent leave
• The job protection employees have when they return

If your handbook does not have this yet, it needs to. This is not optional documentation.

KushHR’s Minnesota Employee Handbook template already includes a compliant PFML policy section, so you are not starting from scratch. If you’ve been putting off updating your handbook, this is a good reason to get it done now.

Quick Reference Checklist

Use this to confirm you have the basics covered:

• Register for a Minnesota UI Employer Account at uimn.org (if you don’t already have one)
• Designate a Paid Leave Administrator in your UI account
• Create a Paid Leave Administrator Account at paidleave.mn.gov
• Download and post the required Paid Leave notice where employees can see it
• Notify each employee individually and document their acknowledgment
• Add new-hire notice to your onboarding process (required within 30 days of hire)
• Update payroll to withhold and remit PFML premiums starting January 1, 2026
• Pay the first quarterly premium by April 30, 2026
• Decide your PTO top-off and intermittent leave policies
• Add a PFML policy to your employee handbook

The Bottom Line

Minnesota’s PFML program adds a layer of compliance responsibility, but the core of it is manageable. The state handles eligibility, benefits, and payments. Your job is to set up the accounts, run the payroll correctly, post the required notices, and have a process ready for when someone needs to use it.

The biggest risk for small businesses is not knowing about any of this until something goes wrong. You are reading this guide, so you are already ahead of that.

If your employee handbook does not yet reflect the new Minnesota PFML rules, that is a gap worth closing now. Our Minnesota Employee Handbook template is specifically written for cannabis businesses, and it covers PFML along with the other state-specific policies you are required to have in writing.