What paid family and sick leave does Minnesota require in 2026?

The gap that catches out-of-state employers is the 50-employee assumption. Federal FMLA hits at 50 employees, but Minnesota Paid Leave and ESST apply from your first Minnesota hire. A three-person Minneapolis team carries the same 0.88% premium and sick-leave accrual as a 3,000-person enterprise, with only a reduced premium rate available to genuinely small employers. Compare how a state without a paid-leave programme handles this in our Iowa paid family and sick leave guide.

The benefit replaces wages on a sliding scale that favours lower earners, paying up to 90% of average weekly wage at the bottom band and tapering for higher pay, with a weekly maximum of $1,423 for 2026. The state pays the benefit directly, so your payroll runs unchanged through the leave. Check the Minnesota employer cost calculator to see how the premium lands against total employment cost.

Small employers with 30 or fewer employees pay a reduced premium of 0.66% rather than the standard 0.88%, and may recover a larger share from employees. Job protection attaches after 90 days of employment, meaning a worker draws Paid Leave wage replacement before the role itself is protected. If you're weighing the full cost of a Minnesota hire, the Minnesota wage and overtime guide covers what you owe under the Minnesota Payment of Wages Act alongside this premium.

Covered uses are broad under the Minnesota Department of Labor and Industry rules: an employee's own illness, care for a family member, and safe time tied to domestic violence, sexual assault, or stalking. Minnesota's family definition reaches beyond the federal one, so the same accrued hours cover a wider set of caregiving situations than a national policy expects.

For 2026 the state added a front-load option: you may advance the estimated ESST a worker will accrue rather than tracking hour by hour, provided the advanced amount meets what actual hours would have earned. A national sick-leave policy that accrues less than 1 hour per 30 worked is short on every Minnesota payroll. Minneapolis and St. Paul both have local ordinances that predate the state floor, so location-specific rules apply. See what a comparable hire in Wisconsin costs without statewide paid leave in our Wisconsin paid family and sick leave guide.

FMLA extends to 26 weeks for military caregiver situations. The Pregnant Workers Fairness Act (PWFA), enforced by the EEOC, requires reasonable accommodation at any employer with 15 or more employees, separate from any leave entitlement. If you're hiring at a point where FMLA and the Minnesota termination rules both apply, the Minnesota termination law guide covers the reinstatement obligations that attach to a leave return.

What that looks like day to day: a Paid Leave claim specialist files the employer verification with Minnesota Paid Leave and tracks the 20-week clock against the $185,000 wage base; the sick-leave ledger accrues 1 hour per 30 worked up to 48 hours and applies the Minneapolis or St. Paul overlay automatically by work location; and the 0.88% premium is collected and remitted on the state portal schedule. Verify your Minnesota tax obligations alongside leave costs in the Minnesota state tax and unemployment insurance guide.

There is no setup fee and no exit fee, and statutory employer cost passes through at cost, itemised on every invoice. Contractor onboarding, EOR payroll, and entity graduation all live on one platform: a Minnesota contractor who converts to W-2 keeps their record, and that same employee can graduate to your own US entity when the model no longer fits, without switching systems. Use the Crossover Calculator to see the month the model flips, or talk to an expert about your first Minnesota hire. EOR is the right model, until it isn't.