Minnesota will start the new year with a paid leave law that took years to implement, launching a new benefit — and a new tax — for workers and employers.
Political stakes are high for the success of the program, which a DFL-controlled Legislature passed and Gov. Tim Walz signed into law with a host of other progressive policies in 2023.
Minnesota has a spotty record when it comes to rolling out statewide programs, and paid leave has already faced headwinds, including 11th-hour legislative negotiations that threatened to deconstruct the program before it began.
Business leaders have repeatedly sought to roll back the law, saying it puts an undue burden on employers. Many of those employers, particularly small businesses, have struggled to understand and implement the new benefit by the Jan. 1 deadline. And Minnesota Republicans, who have focused on fraud in other government programs as they seek to unseat Walz in November, will be eyeing paid leave closely for possible misuse.
At the same time many Minnesotans are counting on the program, which allows workers to take up to 12 weeks of family or medical leave at up to 90% pay. Thirteen states and the District of Columbia have similar programs.
Minnesota’s paid leave law requires workers and employers to contribute to a payroll tax that will be pooled into an insurance fund to pay claims.
In the years since paid leave became law, officials have crisscrossed the state and worked with stakeholders including employers, workers and health care providers to craft the program and educate Minnesotans on what it entails.
“Certainly, throughout the course of the debate about whether to have this program ... there are always going to be a wide range of views,” said Matt Varilek, commissioner of Minnesota’s Department of Employment and Economic Development, at a Dec. 30 news conference. “We appreciate, though, that folks have been very constructive about engaging with us and giving us ideas we can use.”
