(The Center Square) – A bill to create a mandatory paid leave program for all Minnesota employers narrowly passed the Senate Monday.
The Senate’s 34-33 vote on its version of the bill, which was renamed HF 2. The House of Representatives voted 68-64 May 2 on similar legislation. The bills now head to conference committee to reconcile differences.
Both bills include creating a Family and Medical Benefits Insurance Division within the Department of Employment and Economic Development. Employees who apply must have earned at least 5.3% of the state’s average annual wage, rounded to the next lower $100 in covered employment in their base period. Employers and employees would pay a payroll tax to fund the benefits so employees could take up to 12 weeks off work, with partial wage replacement, to care for a new baby or handle their own or a family member’s health crisis.
Businesses with fewer than 30 employees would pay lower quarterly premiums than bigger businesses. Taxable wages subject to the premium at businesses with up to 10 employees would be reduced each quarter by $12,500 times the number of employees. Taxable wages subject to premium for companies with 10 to 20 employees are reduced by $480,000 per year. At companies with 21 to 29 employees, the $120,000 per quarter exclusion is reduced by $12,000 per employee over 20 employees. The reduction solely impacts the employer’s premium amount. The employer still needs to deduct the employee portion of the premium.
Under the House bill, the DEED commissioner could grant $1,000 to $3,000 to businesses with up to 50 employees to help them defray the cost of hiring a replacement worker or for significant wage-related costs due to an employee’s leave.
The Senate bill provides a benefit to small businesses without approved private plans if more than 15% of employees are receiving benefits in a given week. Grants are no more than 25% of the wages earned by employees on leave in the most recent quarter, divided by 13, or $300 per week per employee on leave. The grants have to be used to hire temporary workers or increase wages for current employees. The state can’t grant more than $5 million annually for these grants.
Under Minnesota’s current laws, employees who’ve worked for their employer at least half-time for one year may take up to 12 weeks unpaid leave, if the employer has at least 21 employees at a single site, to care for a qualified relative, get help due to stalking or domestic violence, or nurture a child following birth or adoption.
A July 2022 Breeze survey of 1,001 employed American women between the ages of 18 to 44 found that 74% of women don’t think they’d have cash savings left after eight weeks of unpaid maternity leave and 47% would take a 5% pay cut to receive eight weeks of paid maternity leave.
McFarland Trucking President and CEO Geoff Baker said in a statement that the bill will make staffing challenges worse.
“Safely hiring a temporary truck driver is not an option, which will be a problem for anyone hiring skilled workers that require significant training,” Baker said. “Workforce, supply chain and quality of life are all connected.”
Bill co-author Rep. Jeff Brand, DFL – Saint Peter, said growing Minnesota’s labor force is a long-term challenge. A family-friendly workplace, with paid family and medical leave, will help workers, families and businesses.
“No longer will working families need to worry about compromising between their paycheck and the welfare of their loved ones,” Rep. Ruth Richardson, DFL-Mendota Heights, said.
