Purpose of the Bill

The bill aims to modify Minnesota's existing paid leave program related to economic development. It seeks to establish clearer definitions and guidelines concerning which employees and employers are covered under the paid leave statutes and how private leave plans should operate.

Main Provisions

• Definition Changes: Clarifies who qualifies as an "employee" by excluding certain groups such as self-employed individuals, independent contractors, seasonal employees, and employees of small employers (defined as having 15 or fewer employees).
• Employer Definition: Specifies entities considered employers, including various publicly funded bodies and charter schools, while excluding the federal government and self-employed individuals who have chosen coverage.
• Seasonal Employee Criteria: Redefines a seasonal employee as one who works up to 150 days in 52 weeks, specifically in the hospitality sector. Employers must certify and apply to classify employees as seasonal and notify the department if an employee no longer qualifies.
• Private Plan Requirements: Outlines criteria that private medical and family benefit plans must meet to be approved, such as providing equal or greater benefits compared to public options and covering all employees. Private plans must not impose additional restrictions or conditions beyond what the law requires.
• Premium Rate Adjustments: Allows the commissioner to adjust premium rates annually based on historical data, ensuring the program's financial health and a fund balance of at least 25% of total expenditures. The maximum premium rate is capped at 1.2% of taxable wages paid to each employee.

Significant Changes to Existing Law

• Implementation Date Change: Adjusts the start date for payment of family and medical benefits from January 1, 2026, to January 1, 2027.

Relevant Terms

• Paid Leave
• Employee Definition
• Employer Definition
• Seasonal Employee
• Small Employer
• Private Plan
• Medical and Family Benefits
• Premium Rates Adjustment