For Toni Kay Mangskau, 2017 was a cruel year.
Her mother was being treated for cancer when her brother, who has developmental issues and of whom she is her guardian, was in intensive care for weeks. Her children also had health problems that required her attention.
“It’s just a fight where you want to be there for your loved ones,” said Mangskau, whose only option was unpaid leave. The health worker lost a third of her income that year.
She was among advocates who gathered Thursday at the state Capitol to watch as Minnesota became one of twelve states to pass sick leave and paid family leave requirements.
Governor Tim Walz has approved the creation of a state program that will ensure workers can take weeks or months off on partial pay after having a child or when they or a family member have a serious health problem. They may also be able to take time off following an adoption, related to a family member’s military deployment, or in situations of domestic abuse, sexual assault, or stalking.
“The vast majority of nations have it because they know it’s the right thing to do,” Walz said. “They also know it’s the right thing to do to build their economy, to make it resilient, strong and healthy.”
The change won’t take effect until January 2026. Lawmakers delayed the start of the program by six months, one of several adjustments made amid concerns from employers and other employers, including school districts.
Lawmakers also scaled back initial plans to allow workers to take up to 12 weeks for their own health issues and 12 weeks for someone else’s care in the same year. Instead of 24 weeks total leave, they capped it at 20 weeks with a 12-week limit for each type of leave. Lawyers said it’s rare for anyone to use the permitted full time, and people will have to meet certain health requirements to qualify.
Despite the tweaks, business leaders said they didn’t feel heard in the Capitol this session.
“This will be a significant burden on businesses. It will increase the costs of operating in Minnesota,” said Chamber of Commerce President and CEO Doug Loon. “Unfortunately, what we’re seeing is legislation without listening to all perspectives. Some might call it bold, but I would say it’s more divisive.”
House members already design, implement and administer complicated benefit packages and believe adjustments are needed to make the state’s program “solvent, viable and fair,” the House’s Lauryn Schothorst added in a statement on Thursday. She said the group will advocate to refine the program before it starts in two and a half years.
The state is using $668 million of the projected budget surplus to leverage the paid vacation program. Once it starts in 2026, it will be funded through an employers’ 0.7% payroll tax, similar to unemployment insurance. Employers will be able to transfer half of this cost to employees.
The tax could be raised, and other states with paid leave programs have had to make these adjustments. But in another late-session change, Minnesota lawmakers agreed to cap the rate at 1.2%.
The new law requires the state to do an actuarial review this year of the program’s finances, including whether the 0.7% payroll tax amount is sufficient. Republican lawmakers emphasized during the session that the analysis should have been done before passing a bill.
“We may have to go over a 1.2% threshold. And yet we’re implementing a program without any actuarial studies, without any qualified analysis beyond what the attorneys have done,” said Senator Eric Pratt, R-Prior Lake, during the final Senate debate on the bill.
Republican Party lawmakers pushed to allow employers to use private insurance plans to offer paid leave and for the state to provide tax credits to companies with the benefit.
Democrats responded that the private market had failed to meet the needs of Minnesotans. They said at the signing of the bill on Thursday that after a decade of work, numerous committee hearings and watching 11 other states pass similar programs, their plan has been well reviewed.
Starting in 2026, employers will have to join the state plan or drop out if they offer the same or better benefits, said Ruth Richardson, sponsor of the House bill, DFL-Mendota Heights.
“By being a state pool, it actually creates one of the most affordable options for providing paid sick and family leave,” Richardson said of the state program. “So even for some of the biggest companies that are offering this, they’re often paying a lot more to offer really similar benefits.”
The new law offers payroll tax breaks for smaller companies, Richardson noted, as employers with fewer than 30 employees would see reduced costs.
Lawmakers also passed a sick time and paid security measure this session, which allows workers to earn paid time off for short-term absences, such as a doctor’s appointment or caring for a child with the flu. Companies must cover the cost of this requirement.
Joy McAfee, who runs a small business as a doula, was among those at the Capitol to celebrate the paid leave. She said she helped a lot of parents who didn’t have enough paid leave to heal and bond with a new baby. When she gave birth to their first child, her husband was unable to take time off and she had to care for their son while suffering from severe postpartum depression.
“I see parents consistently breaking down about ‘How are we going to make this work? How are we going to do this?'” McAfee said. “This bill will change the way families navigate their ability to take care of themselves, to attach and tune in to their children, to care for their loved ones.”
Copywriter Briana Bierschbach contributed to this report.