Staring Jan. 1, the state’s Paid Family Medical Leave program will begin, compelling employers to provide paid family leave for several situations including adoption or birth of a child and caring for a family member with a serious injury.
The law passed the Minnesota Legislature in 2023 and provides employees up to 12 weeks of family leave and 12 weeks of medical leave for a combined 20 weeks maximum per year. These benefits will be available to both spouses in cases of birth and adoption.
The law was initially funded with one-time funds of $670 million from the state’s budget surplus at that time. In the future, the costs will be split between the employer and employee in addition to a 0.88% payroll tax.
Minnesotans who earn at least 5.3% of the state’s average annual wage (currently about $3,900) are eligible. The law also provides several protections for employees regarding using leave including job protection,
Using this leave, employees will not earn their full income, but anywhere from 55-90% depending on income, with a sliding scale of what percentage of each dollar an employee will receive at different tiers.
“Even the calculation of what they are going to pay for benefits is very difficult to figure out,” said Cathy Moen, ISD 200 Director of Human Resources, when explaining the rollout in ISD 200 at the Dec. 17 school board meeting.
The maximum pay per week is $1,423 which is the average weekly wage in Minnesota.
As the program rolls out, there are still many unknowns from the costs to businesses to downstream impacts like temporary workers.
One aspect that is certain is employees will receive more time off, with the new program offering leave that is “more robust than what’s generally offered” in private insurance currently, said Kristy Barse, President of the Hastings Chamber of Commerce.
While this program is an oddity within the United States, with less than half of states providing some form of PFML, it is standard in nearly every other industrialized nation across the globe at rates much longer than the 12 weeks, or even the maximum 20 weeks, that will be the norm in Minnesota starting next year.
Topping the chart globally is France which offers new mothers 172 weeks of paid maternity leave, according to the Bipartisan Policy Center. A soon-to-be similar comparison is that of Mexico, which offers the same 12 weeks but only for maternity leave nationally.

PFML and Hastings Businesses
Paid Family Medical Leave and Earned Sick and Safe Time were two of the Hastings Chamber of Commerce’s main legislative focuses last year.
The chamber still opposes the program even as it works with businesses to prepare for its rollout: “private employers know their business the best […] we feel that should be done in the private sector,” said Barse.
According to Barse, there are still a lot of unknowns about the program even less than a month to its launch. Many businesses, even those that have been preparing are “not entirely sure how it’s going to roll out.”
Barse has been sending business owners to the Minnesota Department of Employment and Economic Development (DEED) website and call line and been “impressed with the DEED website and 1-800 number […] DEED does a really good job fielding questions and providing resources,” said Barse.

ISD 200
The rollout of PFML across ISD 200 showcases more unknowns with the new program. Chief among them is cost.
As staff, especially teachers, take more time off, the district will need more substitute teachers. The costs associated with higher numbers of substitutes is unclear.
The district’s 2026 budget added an additional $500,000 to pay substitute teachers, but that amount was not specific to an estimated cost, instead “in hopes of trying to at least offset most or some of that cost,” said Moen.
Already the district is finding that staff are taking more time off, with two employees already approved for leave after having babies in 2025. In addition, new fathers are taking advantage of the paternity leave.
“What we are finding in our district is we have paternal leaves that are being requested in increasing numbers as compared to what we’ve had because they can take paid leave under this family medical leave,” said Moen.
Because employees are able to retroactively apply for leave from events in 2025, the cost of a single year won’t be necessarily apparent until 2027.
“This first year is going to be a double hit because we’ve got the people from 25 eligible. I don’t know if we’ll know a single year until the second year,” said Moen.
Another potential issue with increased teacher leave is the scarcity of substitute teachers, which has been an issue since the pandemic.
Increased leave and therefore increased demand for substitute teachers is expected to compound the issue.
“There are some pretty big district impacts to this new family leave,” said Moen.