If you run a business in Minnesota, the new paid family and medical leave law will bring fresh legal and financial duties. Starting in January 2026, this law will change how you manage employee leave, payroll and compliance. You should start preparing now so you’re not caught off guard when the changes arrive.
What this new law means for your business
The law gives eligible workers up to 20 weeks of paid leave each year for medical or family needs. This covers caring for a new child, dealing with a serious personal illness or helping a sick family member. It also includes time off for domestic abuse situations or military service.
The state will run the program, but the cost gets shared. You and your employees will fund it through payroll contributions. Just like how unemployment insurance works.
Financial impact on your business
Starting January 2026, you’ll need to contribute to a state-managed leave fund. The initial rate should be 0.7% of employee wages, which you can split between yourself and your workers. For businesses with tight margins, this could add new financial pressure.
In addition, here are compliance requirements you need to know. You’ll also need to update the following:
- Payroll systems
- Benefits policies
- Employee handbooks to match the law
Not following the rules could lead to penalties, audits or even lawsuits.
Steps you can take right now
The sooner you act, the more control you’ll have over how this law affects your business. Here are key actions you can take today:
- Review your current leave policies: This is to spot gaps or conflicts
- Meet with your payroll provider: To discuss technical updates
- Educate your HR team and managers: To discuss what to expect
It is also important to stay ahead of legal risks so talking with an employment attorney might be helpful.
Being proactive now will save you from costly mistakes later.