How Minnesota’s PFML Will Change the Way Small Businesses Manage Leave

Minnesota’s new Paid Family and Medical Leave law takes effect in 2026. Here’s how it will impact small businesses and how to prepare your policies, people, and payroll systems now.

How Minnesota’s PFML Will Change the Way Small Businesses Manage Leave

In 2026, Minnesota joins a growing list of states with statewide Paid Family and Medical Leave (PFML). The program promises greater support for employees facing major life events but for employers, it also brings operational and cultural shifts that can’t be ignored.

Whether you run a team of 5 or 150, PFML will change the way you manage leave. The good news? You still have time to prepare. But that time should be used wisely.

🧭 A Quick Refresher on PFML

Starting January 1, 2026, eligible Minnesota employees will be entitled to up to 20 weeks of paid leave per year for:

• Bonding with a new child

• Recovering from their own serious health condition

• Caring for a seriously ill family member

• Military family needs

• Safety leave related to domestic violence, stalking, or sexual assault

The program will be funded by a state-run insurance pool, with premiums split between employers and employees (up to 0.7% total). Employers must begin withholding employee contributions on January 1, 2026, with first payments due by April 30, 2026.

⚠️ What This Means for Small Businesses

For many small businesses, the introduction of PFML will bring both new administrative responsibilities and team coverage challenges.

Here’s what to expect:

1. Leave Requests Will Increase

Employees who might have gone without time off—due to financial pressure—now have access to paid leave. That’s a good thing, but it means more absences to plan for.

2. Policy Coordination Will Get More Complex

PFML won’t replace existing federal protections like FMLA. In fact, you may be managing multiple leave laws at once:

• PFML

• FMLA (if you have 50+ employees)

• Earned Sick and Safe Time (ESST)

• Short-term disability

• PTO or vacation

3. Your Managers Will Be on the Front Lines

The success of your PFML rollout depends on how well your managers respond to leave requests, handle workloads, and communicate with employees during transitions.

4. You’ll Need a Payroll and Compliance Game Plan

Whether you participate in the state plan or apply for a private plan exemption, your payroll systems need to:

• Withhold contributions accurately

• Track covered wages

• Submit quarterly reports to the state

• Maintain leave records in case of audits

💡 How to Plan Without Disruption

You don’t need to overhaul your business to comply with PFML—but you do need a strategy.

Start with:

• A leave policy review

• A decision on whether to use the state or private plan

• A training plan for leaders and managers

• A communication timeline for your employees

Most importantly: Don’t wait until December 2025. The earlier you prepare, the smoother the rollout and the less impact on your day-to-day operations.

🛠 How People Solutions Hub Can Help

We understand the unique pressures small and growing businesses face. That’s why People Solutions Hub offers hands-on, practical support to help you prepare for PFML without added stress.

We provide:

• Custom PFML readiness plans

• Policy development and integration

• Private plan evaluation and coordination

• Manager training and communication toolkits

• Ongoing HR compliance support

Let’s make PFML work for your team not against your business.

📩 Email us at info@peoplesolutionshub.co 🌐 Learn more at www.peoplesolutionshub.co