Minnesota Employers Should Review Paid Leave and Sick Time Policies for 2026

Paid Family and Medical Leave

Beginning January 1, 2026, Minnesota will provide Minnesota Paid Leave to employees for up to 12 weeks for the employee's own serious health condition, caring for a family member or new child, and certain military or personal safety issues (or up to 20 weeks in total, for both family and medical leave). Minnesota employers must comply with the law, with limited exceptions. Minnesota Paid Leave will be paid directly to employees by the state, funded by taxes on wages that are paid by both the employer and employees. 

Notice Requirements. By December 1, 2025, employers must inform workers about the new Minnesota Paid Leave law by displaying a poster and individually notifying employees. The notice must be provided to employees in their primary language and employees must acknowledge receipt. 

A sample poster and employee notice is available on the Minnesota Paid Leave website. 

Payroll Taxes and Setup. Employers should set up their Minnesota Paid Leave account on the Minnesota Unemployment Insurance Program website: uimn.org. An employer's first payroll taxes are due April 30, 2026, based on the amount of wages paid in the first quarter of 2026, but employers can deduct employee payroll taxes beginning January 1. 

State or Private Plan. Employers can choose to provide Minnesota Paid Leave through the state or an equivalent private plan, which can be purchased through an insurance carrier or self-insured. Employers should create an account (uimn.org), designate a Paid Leave Administrator for the private plan (paidleave.mn.gov), and submit a request for equivalent plan substitutions to the Minnesota Department of Employment and Economic Development. 

Final Steps. Prior to implementation, employers should: 

• Prepare employee notice and communications. 
• Update employee handbook policies. 
• Set up a Minnesota Paid Leave account (uimn.org). 
• Confirm Paid Leave plan type (state or private). 

Earned Sick and Safe Time

The Minnesota Department of Labor and Industry announced its intent to adopt new rules clarifying several aspects of Minnesota's ESST statute. The department intends to adopt the rules without hearing, unless a sufficient number of people request a hearing by November 26, 2025. Public comments can be submitted to dli.rules@state.mn.us.

Accrual Based on Location Worked. Under the proposed rules, employees who work more than half their hours in Minnesota accrue ESST for all hours worked, regardless of where those hours are performed. Conversely, employees who work more than half their hours outside Minnesota accrue ESST only for time worked within Minnesota. For remote work, the relevant factor is the employee's physical location while working. 

Employers should make a good-faith estimate of whether an employee will work primarily (more than 50%) in Minnesota to determine ESST accrual. If a mid-year change alters ESST accrual, the employer must provide written notice. 

Clarifications on Accrual, Time Credited, Advancement, and Deductions. Under the proposed rules, employees accrue one hour of ESST for every 30 hours worked, up to a maximum of 48 hours per year. Employers must credit accrued ESST no later than the payday for the pay period in which the employee earned it. 

If an employee is rehired within 180 days of separation, the employer must reinstate up to 80 hours of previously accrued, unused ESST. 

Employers that advance ESST must ensure that the advanced amount is at least equal to what the employee would have accrued based on actual hours worked. If an employee works more than anticipated and would have accrued more ESST than what was advanced, the employer must credit any additional ESST within 15 calendar days after those hours are worked.

The proposed rule also provides three methods for deducting ESST when an employee is absent from work for an indeterminate length. 

No Requirement to Use ESST. The proposed rules clarify that employees are not required to use ESST and employers cannot compel its use. If an employee declines to use ESST for an absence, that time off would fall outside the statute's legal protections. 

Suspected Misuse. The proposed rules clarify that if an employer suspects an employee is misusing ESST, the employer may request documentation. However, an employer cannot deny future ESST use based on prior misuse. Indicators of suspected misuse include:

• Using ESST on days before or after holidays, weekends, or other days off; 
• Using ESST for less than 30 minutes at the start or end of shifts;
• Using ESST for days the employee requested off but was denied leave; or 
• Discovering evidence or documentation that conflicts with the claimed reason for ESST.