House committee holds over proposed changes to new paid family, medical leave program

Starting Jan. 1, 2026, almost every worker in Minnesota will be able to take up to 12 weeks paid leave to welcome a new child, take care of a parent in hospice or recover from an injury through the state’s newly launched paid family and medical leave program.

Modeled after the state’s unemployment insurance program, the program will be funded by a 0.88% payroll tax split between employers and employees.

Legislation making Minnesota the 13th state providing paid leave passed in 2023, after years of debate. However, Rep. Dave Baker (R-Willmar) said employers’ opinions weren’t sufficiently considered during the legislative process, and the program doesn’t always mesh well with benefits developed over years through collective bargaining agreements.  

Baker has proposed modifications to the program through HF1976, which, as amended, was laid over Thursday by the House Workforce, Labor, and Economic Development Finance and Policy Committee.

A major concern Baker has expressed is that small businesses will not be able to absorb an employee’s absence as easily as large businesses. The bill would reduce the maximum amount of leave time allowed from 12 weeks to six weeks for businesses with 50 or fewer employees.

Rep. Emma Greenman (DFL-Mpls) was among those who object to the proposal, saying it would continue to put small businesses at a disadvantage when trying to compete for workers. Moreover, she said, the time it takes for cancer treatments or recovering from childbirth is the same for people who work at big firms or small.

“We set the floor at 12 weeks for a reason,” Greenman said.

The bill would also set a flat wage replacement rate of 0.66% of a person’s weekly wage rather than three-tiered wage-replacement rates. In current law, lower income workers will receive a greater percentage of their weekly wage — up to 90% replacement for those earning half the state average or less, and those earning the state average or more would receive 55% of their weekly wage. The bill would not remove the cap, which is currently set at $1,372 per week.

Other provisions in the bill would:

• allow the Department of Employment and Economic Development to contract with private firms to process benefits or handle other administrative tasks;  
• remove a provision offering family leave to someone with a personal relationship with expectation of caregiving duties;
• redefine seasonal employees of the hospitality industry exempt from the program as those working 180 days or fewer instead of 150 days;
• exempt elected officials, work-study students, and temporary government employees such as poll workers; and
• set a 50/50 premium split for workplaces covered by a collective bargaining agreement.

Rep. Cedrick Frazier (DFL-New Hope) said paid family and medical leave is not the one-size-fits-all program characterized by opponents. He cited, as an example, accommodations to small businesses such as lower premium amounts and grants to help replace workers on leave. However, he appreciates talking about possible modifications to the program instead of delaying or killing it.

“I don’t agree it needs to be changed though,” he said.