HF2 Summary: Minnesota Paid Family and Medical Leave Program

• Creates a new paid family and medical leave insurance program (Chapter 268B) providing wage replacement benefits for employees taking bonding, family care, medical care related to pregnancy, serious health conditions, safety leave, and qualifying exigency leave, effective January 1, 2026

• Establishes employer and employee premium contributions (employers pay minimum 50%, employees pay remainder) with rates starting at 0.7% of taxable wages for employers participating in both family and medical programs, subject to annual adjustments capped at 1.2%

• Provides employees with reinstatement rights, continued health insurance coverage during leave, and employment protections against retaliation; prohibits employers from requiring exhaustion of paid time off before taking leave under this program

• Allows employers with 30+ employees to establish private plans meeting state standards as alternative to the public program; includes $5 million annually for small business assistance grants for employers with 30 or fewer employees

• Appropriates $668.3 million in fiscal year 2024 from general fund to establish the family and medical benefit insurance account, with ongoing administrative costs funded from premium collections and $20 million allocated for direct care worker premium reimbursement