SF 3141

Introduction - 94th Legislature (2025 - 2026)

Posted on 07/02/2025 10:37 a.m.

A bill for an act
relating to economic development; modifying the paid leave program; amending
Minnesota Statutes 2024, sections 268B.01, subdivisions 17, 18, 23, 35, by adding
a subdivision; 268B.04, subdivisions 3, 5; 268B.10, subdivisions 2, 3; 268B.11;
268B.14, subdivision 7.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2024, section 268B.01, subdivision 17, is amended to read:

Subd. 17.

Employee.

(a) "Employee" means an individual who performs services of
whatever nature for an employer.

(b) Employee does not include employees of the United States of America, self-employed
individuals, or independent contractors.

(c) Employee does not include seasonal employees as defined in subdivision 35.

new text begin (d) Employee does not include an employee of a small employer, unless the employee
individually elects coverage under section 268B.11, subdivision 1. In such cases, services
provided by the employee are considered covered employment under subdivision 15.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2024, section 268B.01, subdivision 18, is amended to read:

Subd. 18.

Employer.

(a) "Employer" means:

(1) any person, type of organization, or entity, including any partnership, association,
trust, estate, joint stock company, insurance company, limited liability company, or
corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee, or
the legal representative of a deceased person, having any individual in covered employment;

(2) the state, state agencies, Minnesota State Colleges and Universities, University of
Minnesota, and other statewide public systems;

(3) any municipality or local government entity, including but not limited to a county,
city, town, school district, Metropolitan Council, Metropolitan Airports Commission, housing
and redevelopment authority, port authority, economic development authority, sports facilities
authority, board or commission, joint powers board or organization created under section
471.59, destination medical center corporation, municipal corporation, quasimunicipal
corporation, or other political subdivision. An employer also includes charter schools; and

(4) the taxpaying employer as described in section 268.046, subdivision 1.

(b) Employer does not include:

(1) the United States of America; deleted text begin or
deleted text end

(2) a self-employed individual who has elected and been approved for coverage under
section 268B.11 with regard to the self-employed individual's own coverage and benefits deleted text begin . deleted text end new text begin ;
or
new text end

new text begin (3) a small employer unless the small employer has elected to provide coverage under
section 268B.11, subdivision 1a. In such cases, services provided by the employee of the
small employer are considered covered employment under subdivision 15.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2024, section 268B.01, subdivision 23, is amended to read:

Subd. 23.

Family member.

(a) "Family member" means, with respect to an applicant:

(1) a spouse or domestic partner;

(2) a child, including a biological child, adopted child, foster child, stepchild, child of
a domestic partner, or child to whom the applicant stands in loco parentis, is a legal guardian,
or is a de facto custodian;

(3) a parent or legal guardian of the applicant;

deleted text begin (4) a sibling;
deleted text end

deleted text begin (5) deleted text end new text begin (4) new text end a grandchild;

deleted text begin (6) deleted text end new text begin (5) new text end a grandparent deleted text begin or spouse's grandparent deleted text end ; new text begin and
new text end

deleted text begin (7) a son-in-law or daughter-in-law; and
deleted text end

deleted text begin (8) an deleted text end new text begin (6) up to one new text end individual new text begin annually designated by the applicant new text end who has a personal
relationship with the applicant that creates an expectation and reliance that the applicant
care for the individual without compensation, whether or not the applicant and the individual
reside together.

(b) For the purposes of this chapter, "grandchild" means a child of the applicant's child.

(c) For the purposes of this chapter, "grandparent" means a parent of the applicant's
parent.

(d) For the purposes of this chapter, "parent" means the biological, adoptive, de facto
custodian, or foster parent, stepparent, or legal guardian of an applicant or the applicant's
spouse, or an individual who stood in loco parentis to an applicant when the applicant was
a child.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2024, section 268B.01, subdivision 35, is amended to read:

Subd. 35.

Seasonal employee.

(a) A seasonal employee is an individual who is employed
for no more than 150 days during any consecutive 52-week period deleted text begin in hospitality deleted text end deleted text begin by an
employer whose average receipts during any six months of the preceding calendar year
were not more than 33 percent of its average receipts for the other six months of such year deleted text end .

deleted text begin (b) For the purposes of this section, "hospitality" has the meaning given under the
collective definitions in section 157.15, subdivisions 4 to 9 and 11 to 14.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end For an individual to be classified as a seasonal employee, an employer must apply
to the department in a format and manner prescribed by the commissioner and certify that:

(1) the employee meets or will meet the 150-day maximum employment duration under
this subdivision; new text begin and
new text end

deleted text begin (2) the employee's primary line of work is hospitality;
deleted text end

deleted text begin (3) the employer meets the receipts threshold under this subdivision; and
deleted text end

deleted text begin (4) deleted text end new text begin (2) new text end the employer has provided the required employee notice required under section
268B.26.

deleted text begin (d) deleted text end new text begin (c) new text end An employer must notify the department, in a format and manner prescribed by
the commissioner, within five business days if a previously classified seasonal employee
no longer meets the criteria above and is no longer a seasonal employee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2024, section 268B.01, is amended by adding a subdivision to
read:

new text begin Subd. 39a. new text end

new text begin Small employer. new text end

new text begin "Small employer" means an employer with 15 or fewer
employees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2024, section 268B.04, subdivision 3, is amended to read:

Subd. 3.

Weekly benefit amount; maximum amount of benefits available; prorated
amount.

(a) Subject to the maximum weekly benefit amount, an applicant's weekly benefit
is calculated by adding the amounts obtained by applying the following percentage to an
applicant's average weekly wage during the high quarter of the base period:

(1) 90 percent of wages that do not exceed 50 percent of the state's average weekly wage;
plus

(2) 66 percent of wages that exceed 50 percent of the state's average weekly wage but
not 100 percent deleted text begin ; plus deleted text end new text begin .
new text end

deleted text begin (3) 55 percent of wages that exceed 100 percent of the state's average weekly wage.
deleted text end

(b) For applicants that have changed employers within the base period, the weekly benefit
amount is calculated based on the highest quarter of wages in the base period.

(c) The state's average weekly wage is the average wage as calculated under section
268.035, subdivision 23, at the time a benefit amount is first determined.

(d) The maximum weekly benefit amount is the state's average weekly wage as calculated
under section 268.035, subdivision 23.

(e) The state's maximum weekly benefit amount, computed in accordance with section
268.035, subdivision 23, applies to leaves established effective on or after the last Sunday
in October. Once established, an applicant's weekly benefit amount is not affected by the
last Sunday in October change in the state's maximum weekly benefit amount.

(f) For a covered individual receiving family or medical leave, a weekly benefit amount
is prorated when:

(1) the covered individual works hours for wages;

(2) the covered individual uses paid sick leave, paid vacation leave, or other paid time
off that is not considered a supplemental benefit payment as defined in section 268B.01,
subdivision 41; or

(3) leave is taken intermittently.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective November 1, 2025.
new text end

Sec. 7.

Minnesota Statutes 2024, section 268B.04, subdivision 5, is amended to read:

Subd. 5.

Maximum length of benefits.

(a) deleted text begin The total number of weeks that an applicant
may take benefits in a single benefit year for a serious health condition is the lesser of 12
weeks, or 12 weeks minus the number of weeks within the same benefit year that the
applicant received benefits for bonding, safety leave, family care, and qualifying exigency
plus eight weeks. deleted text end new text begin An applicant may not receive more than 12 total weeks of benefits in a
single benefit year except as provided in paragraph (b). Subject to this limit, benefit weeks
may be used in any combination of the benefits available under this chapter.
new text end

(b) deleted text begin The total number of weeks that an applicant may take benefits in a single benefit
year for bonding, safety leave, family care, and qualifying exigency is the lesser of 12 weeks,
or 12 weeks minus the number of weeks within the same benefit year that the applicant
received benefits for a serious health condition plus eight weeks. deleted text end new text begin In addition to the total
benefit weeks permitted under paragraph (a), an applicant is eligible for two weeks of
benefits for a serious health condition related to pregnancy or childbirth, for a total amount
of benefits not to exceed 14 weeks in a single benefit year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective November 1, 2025.
new text end

Sec. 8.

Minnesota Statutes 2024, section 268B.10, subdivision 2, is amended to read:

Subd. 2.

Private plan requirements; medical benefit program.

new text begin (a) new text end The commissioner,
in consultation with the commissioner of commerce, must approve an application for private
provision of the medical benefit program if the commissioner determines:

(1) all of the employees of the employer are to be covered under the provisions of the
employer plan;

(2) eligibility requirements for benefits and leave are no more restrictive than as provided
under this chapter;

(3) the weekly benefits payable under the private plan for any week are at least equal to
the weekly benefit amount payable under this chapter;

(4) the total number of weeks for which benefits are payable under the private plan is
at least equal to the total number of weeks for which benefits would have been payable
under this chapter;

(5) no greater amount is required to be paid by employees toward the cost of benefits
under the employer plan than by this chapter;

(6) wage replacement benefits are stated in the plan separately and distinctly from other
benefits;

(7) the private plan will provide benefits and leave for any serious health condition or
medical care related to pregnancy for which benefits are payable, and leave provided, under
this chapter;

(8) the private plan will impose no additional condition or restriction on the use of
medical benefits beyond those explicitly authorized by this chapter or regulations
promulgated pursuant to this chapter;

(9) the private plan will allow any employee covered under the private plan who is
eligible to receive medical benefits under this chapter to receive medical benefits under the
employer plan;

(10) coverage will continue under the private plan while an employee remains employed
by the employer. For former employees, coverage for the purposes of benefits applies until
the individual is hired by a new employer or 26 weeks pass, whichever occurs first; and

(11) if an application for leave is filed by a former employee to a private plan, the plan
pays benefits for the totality of the leave. Private plans may not cut off eligibility for a
former employee during the course of an approved leave.

new text begin (b) Notwithstanding paragraph (a), a private plan may provide shorter durations of leave
and benefit eligibility if the total dollar value of wage replacement benefits under the private
plan for an employee for any particular qualifying event meets or exceeds what the total
dollar value would be under the public family and medical benefit program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 9.

Minnesota Statutes 2024, section 268B.10, subdivision 3, is amended to read:

Subd. 3.

Private plan requirements; family benefit program.

new text begin (a) new text end The commissioner,
in consultation with the commissioner of commerce, must approve an application for private
provision of the family benefit program if the commissioner determines:

(1) all of the employees of the employer are to be covered under the provisions of the
employer plan;

(2) eligibility requirements for benefits and leave are no more restrictive than as provided
under this chapter;

(3) the weekly benefits payable under the private plan for any week are at least equal to
the weekly benefit amount payable under this chapter;

(4) the total number of weeks for which benefits are payable under the private plan is
at least equal to the total number of weeks for which benefits would have been payable
under this chapter;

(5) no greater amount is required to be paid by employees toward the cost of benefits
under the employer plan than by this chapter;

(6) wage replacement benefits are stated in the plan separately and distinctly from other
benefits;

(7) the private plan will provide benefits and leave for any care for a family member
with a serious health condition, bonding with a child, qualifying exigency, or safety leave
event for which benefits are payable, and leave provided, under this chapter;

(8) the private plan will impose no additional condition or restriction on the use of family
benefits beyond those explicitly authorized by this chapter or regulations promulgated
pursuant to this chapter;

(9) the private plan will allow any employee covered under the private plan who is
eligible to receive family benefits under this chapter to receive family benefits under the
employer plan;

(10) coverage will continue under the private plan while an employee remains employed
by the employer. For former employees, coverage for the purposes of benefits applies until
the individual is hired by a new employer or 26 weeks pass, whichever occurs first; and

(11) if an application for leave is filed by a former employee to a private plan, the private
plan is required to pay benefits for the totality of the leave. Private plans must not discontinue
eligibility for a former employee during the course of an approved leave.

new text begin (b) Notwithstanding paragraph (a), a private plan may provide shorter durations of leave
and benefit eligibility if the total dollar value of wage replacement benefits under the private
plan for an employee for any particular qualifying event meets or exceeds what the total
dollar value would be under the public family and medical benefit program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 10.

Minnesota Statutes 2024, section 268B.11, is amended to read:

268B.11 deleted text begin SELF-EMPLOYED AND INDEPENDENT CONTRACTOR deleted text end ELECTION
OF COVERAGE.

Subdivision 1.

new text begin Individual new text end election of coverage.

(a) A self-employed individual or
independent contractor new text begin , or an individual employed by a small employer that has not made
an election of coverage under subdivision 1a, new text end may file with the commissioner by electronic
transmission in a format prescribed by the commissioner an application to be entitled to
benefits under this chapter for a period not less than 104 consecutive calendar weeks. Upon
the approval of the commissioner, sent by United States mail or electronic transmission,
the individual is entitled to benefits under this chapter beginning the calendar quarter after
the date of approval or beginning in a later calendar quarter if requested by the self-employed
individual or independent contractor. The individual ceases to be entitled to benefits as of
the first day of January of any calendar year only if, at least 30 calendar days before the
first day of January, the individual has filed with the commissioner by electronic transmission
in a format prescribed by the commissioner a notice to that effect.

(b) The commissioner may terminate any application approved under this section with
30 calendar days' notice sent by United States mail or electronic transmission if the
deleted text begin self-employed deleted text end individual is delinquent on any premiums due under this chapter. If an
approved application is terminated in this manner during the first 104 consecutive calendar
weeks of election, the deleted text begin self-employed deleted text end individual remains obligated to pay the premium under
subdivision 3 for the remainder of that 104-week period.

new text begin Subd. 1a. new text end

new text begin Small employer election of coverage. new text end

new text begin A small employer may elect to
participate in the family or medical benefit program, or both benefit programs, under this
chapter on the same terms as an employer who provides covered employment. The
commissioner shall establish procedures for a small employer to elect to participate and
may require that a small employer who elects to receive coverage under this chapter collect
and remit the employer and employee premiums for a minimum period of not less than one
year.
new text end

Subd. 2.

Application.

A self-employed individual who applies for coverage under this
section must provide the commissioner with (1) the amount of the individual's net earnings
from self-employment, if any, from the most recent taxable year and all tax documents
necessary to prove the accuracy of the amounts reported, and (2) any other documentation
the commissioner requires. A self-employed individual who is covered under this chapter
must annually provide the commissioner with the amount of the individual's net earnings
from self-employment within 30 days of filing a federal income tax return.

Subd. 3.

Premium.

deleted text begin A self-employed deleted text end new text begin (a) An new text end individual who elects to receive coverage
under this chapter must annually pay a premium as provided in section 268B.14, subdivision
6, clause (1), times the lesser of:

(1) the individual's self-employment premium base new text begin or taxable wages new text end ; or

(2) the maximum earnings subject to the FICA Old-Age, Survivors, and Disability
Insurance tax.

new text begin (b) An individual whose small employer has not elected to provide coverage under
subdivision 1a, and who individually elects to receive coverage under subdivision 1, shall
remit their premium payment under paragraph (a) through a payroll deduction. The small
employer of such an individual shall remit the employee's premium payments to the
department in the manner directed by the commissioner.
new text end

Subd. 4.

Benefits.

Notwithstanding anything to the contrary, deleted text begin a self-employed deleted text end new text begin an new text end
individual who has applied to and been approved for coverage by the commissioner under
this section is entitled to benefits on the same basis as an employee under this chapter,
except that a self-employed individual's weekly benefit amount under section 268B.04,
subdivision 1, must be calculated as a percentage of the self-employed individual's
self-employment premium base, rather than wages.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2025.
new text end

Sec. 11.

Minnesota Statutes 2024, section 268B.14, subdivision 7, is amended to read:

Subd. 7.

Premium rate adjustments.

The commissioner may adjust the annual premium
rates pursuant to this section prior to January 1, 2026. By July 31, 2026, and then by July
31 of each year thereafter, the commissioner must adjust the annual premium rates for the
following calendar year based on program historical experience and sound actuarial principles
and so that the projected fund balance as a percentage of total program expenditure does
not fall below 25 percent. The commissioner shall contract with a qualified independent
actuarial consultant to conduct an actuarial study for this purpose no less than every year.
A copy of all actuarial studies, and any revisions or other documents received that relate to
an actuarial study, must be provided promptly to the chairs and ranking minority members
of the legislative committees with jurisdiction over this chapter. All actuarial studies, and
any revisions or other documents received that relate to an actuarial study, must also be
filed with the Legislative Reference Library in compliance with section 3.195. A qualified
independent actuarial consultant is one who is a Fellow of the Society of Actuaries (FSA)
and a Member of the American Academy of Actuaries (MAAA) and who has experience
directly relevant to the analysis required. In no year shall the annual premium rate exceed
deleted text begin 1.2 deleted text end new text begin one new text end percent of taxable wages paid to each employee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2026.
new text end