Minnesota Paid Leave program

Minnesota’s paid leave wage tax will remain at 0.88% in 2027, avoiding a tax increase for businesses and workers. However, financial reserves for the program are projected to decline significantly, dropping from $685 million to $198.7 million by 2028 if the rate stays unchanged.

Minnesota’s Paid Leave program faces a funding shortfall, with $598 million paid to 75,000 participants but only $344 million collected through a 0.88% wage tax. The Department of Employment and Economic Development (DEED) may raise the tax to 1.1% by 2027 to address the gap, sparking concerns from small businesses while others support the program’s benefits for employee retention.

Minnesota's Paid Leave program has approved 75,000 applications and distributed $600 million in benefits, but some applicants report delays and financial strain. DEED officials acknowledge complex cases may take longer but emphasize most applications are processed within two to three weeks.