MN to Require Paid Sick Leave and Establish Paid Family and Medical Leave Program

Minnesota has enacted legislation (Senate File 3035) that will require employers to provide paid sick leave to employees. The requirement takes effect January 1, 2024.

The Details

Employee coverage

The law covers all employees (including temporary and part-time employees) who perform work for at least 80 hours in a year in Minnesota.

The requirements won’t apply to building and construction industry employees who are represented by a building and construction trades labor organization if a valid waiver of these requirements is provided in a collective bargaining agreement.

Employer coverage

The law covers all private employers with covered employees.

Accrual and frontloading

Accrual

Employees are entitled to begin accruing paid sick leave on January 1, 2024, or their date of hire, whichever is later. Employees must accrue a minimum of one hour of sick leave for every 30 hours worked, up to a maximum of 48 hours in a year.

Employers must typically permit employees to carry over accrued but unused sick leave into the following year. However, employers may cap total accrual at 80 hours.

Frontloading

In lieu of allowing carryover into the following year, an employer may provide an employee with paid sick leave for the year that meets or exceeds the requirements of the law that is available for the employee's immediate use at the beginning of the subsequent year as follows:

48 hours, if an employer pays an employee for accrued but unused paid sick leave at the end of a year at the same hourly rate as an employee earns from employment; or
80 hours, if an employer doesn’t pay an employee for accrued but unused paid sick leave at the end of a year at the same or greater hourly rate as an employee earns from employment.

Use of leave

An employee may use the paid sick leave as it accrues for:

The employee’s mental or physical illness, treatment, or preventive care;
A family member’s mental or physical illness, treatment, or preventive care;
Absence due to domestic abuse, sexual assault, or stalking of the employee or a family member;
Closure of the employee’s workplace due to weather or public emergency or closure of a family member’s school or care facility due to weather or public emergency; and
When determined by a health authority or healthcare professional that the employee or family member is at risk of infecting others with a communicable disease.

A family member is defined as a:

Child, including foster child, adult child, legal ward, child for whom the employee is legal guardian or child to whom the employee stands or stood in loco parentis (in place of a parent);
Spouse or registered domestic partner;
Sibling, stepsibling, or foster sibling;
Biological, adoptive or foster parent, stepparent, or a person who stood in loco parentis (in place of a parent) when the employee was a minor child;
Grandchild, foster grandchild or step-grandchild;
Grandparent or step-grandparent;
A child of a sibling of the employee;
A sibling of the parents of the employee;
A child-in-law or sibling-in-law;
Any of the family members listed above of an employee’s spouse or registered domestic partner;
Any other individual related by blood or whose close association with the employee is the equivalent of a family relationship; and
Up to one individual annually designated by the employee.

Pay during leave

Employees who use paid sick leave must be paid at the same hourly rate they earn when they are working.

Employee notice and documentation

If the need for use is foreseeable, employers may require up to 7 days’ advance notice of the need for leave. If the need is not foreseeable, an employer may require an employee to give notice of the need for leave as soon as practical. An employer that requires notice of the need to use paid sick leave must have a written policy containing reasonable procedures for employees to provide notice, and must provide a written copy of such policy to employees.

If the absence is more than three consecutive days, the employer may require reasonable documentation that the absence is covered by the law. See the text of the law for details on what is considered reasonable documentation.

Notice, wage statements, and recordkeeping

Employers must provide notice to employees about their rights under the law. The notice must include specified information and must be provided in English and the primary language of the employee. The notice must be provided by January 1, 2024 or at the start of employment, whichever is later. The Minnesota Department of Labor and Industry will prepare a uniform employee notice that employers can use and will make it available in English and the five most common languages spoken in Minnesota.

The means used by the employer must be at least as effective as the following options for providing notice:

Posting a copy of the notice at each location where employees perform work and where the notice must be readily observed and easily reviewed by all employees performing work;
Providing a paper or electronic copy of the notice to employees; or
A conspicuous posting in a web-based or app-based platform through which an employee performs work.

Employers that provide an employee handbook to their employees must include in the handbook the notice of employee rights under the law.

In addition to the employment and payroll records required by the state, an employer must maintain accurate records for each employee showing hours of work as well as the paid sick leave taken. The records must be retained for a period of at least three years. An employer must allow an employee to inspect records at a reasonable time and place.

Wage statements must include the total number of paid sick leave hours accrued and available for use as well as the amount of sick leave hours used during the pay period.

Existing local paid sick leave local ordinances

Paid sick leave ordinances already exist in certain cities in Minnesota. When Minnesota’s paid sick leave law goes into effect January 1, 2024, employers must follow the most protective law that applies to their employees.

Existing paid time off policies

Employers that provide paid sick leave under a paid time off policy or other paid leave policy that may be used for the same purposes and under the same conditions as the law requires, and that meets or exceeds, and doesn’t otherwise conflict with, the minimum standards and requirements provided by the law aren’t required to provide additional paid sick leave.

Retaliation prohibited

Employers are prohibited from taking adverse action against an individual because they have exercised or attempted to exercise rights protected under the law.

Unused leave

Employers aren’t required to pay employee for unused paid sick leave upon the employee's termination, resignation, retirement, or other separation from employment.

Next Steps

If you have employees working in Minnesota for at least 80 hours each year:

Provide paid sick leave in accordance with the requirements of the law beginning January 1, 2024.
Monitor the website of the Minnesota Department of Labor and Industry for the required notices.
Provide the required notices by January 1, 2024, or the start of employment, whichever is later.
Update leave policies and forms and employee handbooks to comply with the law.
Train supervisors on the law.

Note: In the RUN Powered by ADP® Employee Handbook Wizard, a Paid Sick Leave Policy for Minnesota employees will be added closer to the effective date.

Minnesota has enacted legislation (House File 2) that will create a paid family and medical leave program in the state. Contributions to the program and wage-replacement benefits will begin January 1, 2026. Employers can opt to have a private plan to meet the requirements, provided the plan is approved by the state. Effective July 1, 2024, employers are to begin submitting electronic quarterly wage-detail reports to the commissioner. ADP is currently assessing the impact these requirements will have on our products and services and will communicate an update to clients in the future.

The Details

Covered Employers

The program covers all employers with at least one employee performing services for wages (covered employment). For the purposes of the law, covered employment means an employee's entire employment during the calendar year if 50 percent or more of the employment during the calendar year:

Is performed in Minnesota;
Isn’t performed in Minnesota or any other state, or Canada, but some of the employment is performed in Minnesota and the employee's residence is in Minnesota during 50 percent or more of the calendar year; or
Isn’t performed in Minnesota or any other state, or Canada, but the place from where the employee's employment is controlled and directed is based in Minnesota.

Covered employment doesn’t include:

A self-employed individual;
An independent contractor; or
Employment by a seasonal employee (as defined by the law).

Reasons for Leave

The program will cover the following absences:

For pregnancy or to recover from giving birth (medical leave);
For an employee’s own serious health condition (medical leave);
To bond with a new child (bonding leave);
To care for a family member with a serious health condition or a family member who is a military member (family care leave);
A need arising out of a military member's active duty service or notice of an impending call or order to active duty in the United States armed forces, including providing for the care or other needs of the family member's child or other dependent, making financial or legal arrangements for the family member, attending counseling, attending military events or ceremonies, spending time with the family member during a rest and recuperation leave or following return from deployment, or making arrangements following the death of the military member (qualifying exigency leave); and/or
So the employee or a family member may seek medical attention, victim services, counseling, relocation or legal advice because of domestic abuse, sexual assault or stalking (safety leave).

Under the law, “family member" is defined as:

A spouse or domestic partner;
A child, including a biological, adopted, or foster child, a stepchild, or a child to whom the employee stands in loco parentis, is a legal guardian, or is a de facto parent;
A parent or legal guardian of the employee;
A sibling;
A grandchild;
A grandparent or spouse's grandparent;
A son-in-law or daughter-in-law; and
An individual who has a relationship with the applicant that creates an expectation and reliance that the applicant care for the individual, whether or not the applicant and the individual reside together.

Amount of Leave

The maximum number of weeks that an employee may receive benefits in a single benefit year for medical leave is the lesser of 12 weeks, or 12 weeks minus the number of weeks within the same benefit year that the employee received benefits for bonding, safety, family care or qualifying exigency leave plus eight weeks.

The maximum number of weeks that an employee may receive benefits in a single benefit year for bonding, safety, family care or qualifying exigency leave is the lesser of 12 weeks, or 12 weeks minus the number of weeks within the same benefit year that the employee received benefits for medical leave plus eight weeks.

An employer may require leave taken under this law to run concurrently with leave taken under the federal Family and Medical Leave Act. However, employers are prohibited from compelling an employee to exhaust accumulated sick, vacation or personal time before or while taking paid family and medical leave.

With the exception of bonding leave, any claim for benefits must be based on a single qualifying event of at least seven calendar days. There is no minimum for bonding leave.

Employees may begin using leave January 1, 2026.

Employee Notice

If the need for leave is foreseeable, an employee must provide the employer at least 30 days' advance notice before the leave. If 30 days' notice isn’t possible, notice must be given as soon as possible. Whether leave is to be continuous or is to be taken intermittently, notice need only be given one time, but the employee must advise the employer as soon as possible if dates of scheduled leave change or are extended, or were initially unknown.

An employee must provide at least oral, telephone or text message notice sufficient to make the employer aware that the employee needs leave allowed under the law and the anticipated timing and duration of the leave.

An employer may require an employee to comply with the employer's usual and customary notice and procedural requirements for requesting leave.

Reinstatement

Upon return from leave, subject to certain limitations, an employee who has worked at least 90 days for an employer is entitled to be returned to the same position the employee held when leave commenced, or to an equivalent position with equivalent benefits, pay and other terms and conditions of employment. An employee is entitled to reinstatement, even if the employee has been replaced or the employee's position has been restructured to accommodate the employee's absence. See the text of the law for details on limitations on reinstatement rights.

Employer Notice

Effective November 1, 2025, employers must notify their employees about the program. Each employer must issue to each employee no more than 30 days from the beginning date of the employee's employment, or 30 days before premium collection begins, whichever is later, the following written information provided by the state Department of Employment and Economic Development in the primary language of the employee:

An explanation of the availability of family and medical leave benefits provided, including rights to reinstatement and continuation of health insurance;
The amount of premium deductions made by the employer;
The employer's premium amount and obligations;
The name and mailing address of the employer;
The identification number assigned to the employer by the state Department of Employment and Economic Development;
Instructions on how to file a claim for family and medical leave benefits;
The mailing address, email address, and telephone number of the Department of Employment and Economic Development; and
Any other information required by the Department of Employment and Economic Development.

Employers must also obtain a written or electronic acknowledgment of receipt of the information, or a signed statement indicating the employee's refusal to sign such acknowledgment.

The notice may be provided in paper or electronic format. For notice provided in electronic format only, the employer must provide employee access to an employer-owned computer during an employee's regular working hours to review and print required notices.

The state Department of Employment and Economic Development will prepare a uniform employee notice form for employers to use that provides the notice information required. The commissioner will prepare the uniform employee notice in the five most common languages spoken in Minnesota.

Wage Statements

In addition to the information already required, wage statements must include any amount deducted by the employer for the employee’s portion of the premium and the amount paid by the employer for their portion of the premium.

Employer Contributions

For 2026, the premium rate for the program is 0.7 percent of an employee’s wages, but will be adjusted based on usage in subsequent years. Employers must pay at least 50 percent of the applicable premium rate (that is 0.35 percent of an employee’s wages in 2026).

There is a small business exclusion through which employers with fewer than 30 employees will pay a reduced premium amount. See the text of the law for details.

Employee Contributions

Employees, through a deduction, must pay the remaining 50 percent (0.35 percent of their wages in 2026), of the premium not paid by the employer. Deductions for premiums are prohibited from causing an employee's wage, after the deduction, to fall below the rate required to be paid to the worker by law.

Employee Quarterly Reporting

Effective July 1, 2024, employers are to begin submitting electronic quarterly wage-detail reports to the commissioner .

The report must include each covered employee’s name, total wages, and number of hours worked.
Employers may round employees’ total wages to the next lower whole dollar amount for reporting purposes.
For certain employees exempt from the definition of employee ( any individual employed in a bona fide executive, administrative, or professional capacity, or a salesperson who conducts no more than 20 percent of sales on the premises of the employer), the employer must report 40 hours worked for those full-time employees and a reasonable estimate of hours worked for any part-time employees.
Additionally, an employer need not include the name of the employee or other required information on the wage detail report if disclosure is specifically exempted from being reported by federal law.
The report must include all employees who were employed during the payroll period that includes the 12th day of each calendar month.
Even if an employer paid no wages during a calendar quarter, the employer must still submit a report unless the business has been terminated.
Employers may also have to break down the report by business location and separate business unit if required to do so by the commissioner.
The report must be received by the last day of the month following the end of the calendar quarter. However, the commissioner may delay the due date on a specific calendar quarter if the department is unable to receive reports electronically .

Small Employer Grants

Employers with 30 or fewer employees and less than $3,000,000 in gross annual revenues may apply to the state Department of Employment and Economic Development for grants. Grants must be used to hire temporary workers or to increase wages for current employees. The department may approve a grant of up to $3,000 if the employer hires a temporary worker, or increases another existing worker's wages, to substitute for an employee on family or medical leave for a period of seven days or more. The maximum total grant per eligible employer in a calendar year is $6,000.

Next Steps

Review leave policies and update them if necessary.
Watch for the sample notice that must be provided to employees.
Once published, provide the sample notice to new hires and existing employees.
Prepare to begin making contributions on January 1, 2026.
ADP is currently assessing the impact these requirements will have on our products and services and will communicate an update to clients in the future.

Note: Closer to January 1, 2026, a Paid Family and Medical Leave policy for Minnesota employers will be added to Employee Handbook Wizard in RUN Powered by ADP®.

Compliance Update