Temp agencies flooded with requests as workers file for Minnesota’s new paid leave

More than 25,000 workers have already applied for Minnesota’s new paid leave program, sending businesses scrambling to cover their work and creating an unexpected windfall for temp agencies.

True Talent temporary staffing agency and many of its competitors have been fielding an influx in requests for help since Minnesota’s paid medical and family leave law took effect two weeks ago.

As companies learn they need fill-ins to cover those who have applied for the new state benefit, they turn to temp agencies.

“Paid leave is an unexpected, huge win for us as a contract company and as a small company. This is a miracle,” said Stacey Stratton, CEO of True Talent in Edina.

Minnesota officials expect 130,000 Minnesotans to apply for benefits this year, according to Department of Employment and Economic Development, which administers the program.

Stratton expects the new law to boost True Talent’s revenue by 20%.

Meanwhile employers, many of them smaller, remain anxious about the administrative burden and cost of a new payroll tax that pays for the benefit, which allows workers to apply for 12 to 20 weeks of paid leave.

Agencies — including True Talent, Robert Half in Bloomington, Pathway Talent Partners in St. Paul and Versique Executive, Professional and Interim Recruiting in St. Louis Park — are fielding urgent calls for help.

The leave law covers new parents, but also paid time off for employees who are caregivers or ill themselves. Employees must apply through the state for coverage.

Bob Kill, who runs the nonprofit consultant Enterprise Minnesota, said one of his clients, a defense contractor, just had two employees unexpectedly apply for leave.

One is the night shift supervisor; the other is the contractor’s only government-certified welder. The company will have to find replacements.

During the past two weeks, Stratton’s team placed temporary workers at Cambria, Feed My Starving Children and Prime Therapeutic, all employers that recently learned critical workers were applying for leave with the state.

DEED officials conducted seminars and workshops across the state in addition to online ads and staffed hotlines in an effort to help educate employers and help them prepare for changes.

Commissioner Matt Varilek said he also stressed available state grants for smaller companies.

While the agency saw an initial uptick in people applying for benefits, the daily number of applications is starting to level off to about 2,600 inquiries a day, state officials said.

To handle the load, Minnesota created a new division, executed a statewide education campaign and instituted a mandatory employment tax that works similarly to the state’s unemployment insurance program.

As of Monday, Jan. 12, the state issued its first round of paid leave payments to approved applicants. The 2,600 paychecks represent “a milestone that empowers Minnesotans to take time for the moments that matter most,” Varilek said.

This week, True Talent is adding a new recruiter to the staff of five. Stratton is also racing to find 10 more temporary contractors she can pay $30 to $100 an hour. She already has 28 videographers, editors, marketing managers and social media specialists for fill-in gig work for clients.

Josh Roalson, the managing partner at Pathway Talent, is adding a fourth recruiter to his three-person firm because of the high demand.

Roalson said his accounting clients are adapting to new requests for time off with either temp workers or asking existing staffers to take on the extra certified public accounting work.

The affiliated accounting firm, Redpath and Company, also is expanding with eight new accountants as small business clients navigate the new paid leave mandate, Roalson said.

Elizabeth Hang with recruiting and placement giant Robert Half said her agency is getting more calls from employers seeking assistance.

Varilek, at DEED, isn’t sure the new program will consistently increase the number of paid leave applications the state receives long term.