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What to Know About Minnesota Paid Leave

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And how it will impact your small business accounting.

If you’re a small business owner with employees, there are some accounting things you’ve already learned to navigate. Expense reports. Payroll. Sending out W2s.

But a new Minnesota law is going to add some extra work to your plate, starting as soon as October 2024.

So, here’s what you need to know about Minnesota Paid Leave before it hits your bookkeeping.

What is Minnesota Paid Leave? 

According to the official website, “Paid Leave is a new program launching for Minnesotans in 2026.” It provides job protection and partial wage replacement (i.e. paid time off) for employees during certain major life events.

The law outlines two primary types of leave:

  • Family Leave to care for a family member with a serious health condition, or if you’re bonding with a new baby or child in your family.
  • Medical Leave when your own serious health condition prevents you from working as usual.

A couple other conditions also qualify for paid leave: taking time off to support a family member called to active duty, and taking time off if you are facing or supporting a family member facing a significant personal safety issue.

As the 13th state to implement this type of legislation, Minnesota has examples to fall back on, but it will take some time to get the whole program up and running.

How does this impact your small business accounting?

Submit quarterly wage detail reports 

Minnesota Paid Leave will be funded by premiums made up of contributions from you (the employer) and through payroll deductions on employee wages.

In order to determine who is eligible and how benefit payments will be allocated, employers are required to submit quarterly wage detail reports. The first one is due October 31, 2024.Submitting this uses the same online reporting system as Unemployment Insurance. So, you can use the same reporting process and format for MN Paid Leave that you currently do for UI Wage Detail reporting.

Inform and educate your employees 

You are responsible for helping your employees learn about and access Paid Leave. Employers must inform their employees about their rights and benefits under this new program by December, 2025. Written materials, notice posters, and other informational material will be provided by the State. 

Submit Paid Leave premiums

When the program launches January 1, 2026, you can start deducting premiums from employee paychecks. That’s when benefits will become available as well. As an employer, you will have to pay at least 50% of the premium, with the option to pay up to 100%. The remaining percentage (up to 50%) can be deducted from employee pay.

You’ll also begin submitting quarterly premium payments through your Unemployment Insurance account. The first premium payment is due April 30, 2026. Total premium payment for the first quarter will be based on wage details reported between January 1 and March 31, 2026.

Submit Paid Leave premiums

  • If we process payroll for you, there may be a few questions we’ll ask regarding whether you, as the business owner, wish to participate in the program. But we will be filing the report for you.
  • If you process your own payroll, the reporting will be done when you file your Minnesota Unemployment Return.
  • If you are a business owner and you do not have Minnesota Unemployment Obligations, you may opt into the program and open a Paid Leave Only Account.
  • If you’re a small employer, you’ll want to mark January 2026 on your calendar. That’s when you can apply for assistance grants to help support your business during an employee’s absence. Qualifications apply.

Right now, the overall program and its benefits are being handled by a new division of DEED–the Department of Employment and Economic Development. Resources for navigating the onset of Minnesota Paid Leave–like frequently asked questions–can be found at their site.

As we approach additional deadlines and other information becomes available, we will be updating this post and our social media. Save this post and follow us online to stay in the loop.

Best wishes,
-The Clasen & Schiessl CPA Team

P.S. Confused about the point of Paid Leave when we already have Earned Sick and Safe Time? Read this handout to get a side-by-side comparison.

What Your Local CPA is Reading (and You Should Be Too)

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Get smart about your small business support with 3 top book recommendations from your local accounting firm.

Getting excited about decimals and keeping track of income tax adjustments isn’t everyone’s idea of fun. 

(After seven years of studying to become a public accountant, you’d be a little funny, too.)

But anyone can take advantage of the small business support these three books have to offer. Let them inspire you to look at your finances–and yourself–in a whole new light.

How to Win Friends and Influence People by Dale Carnegie 

Yes, this one is a classic. Because while Dale Carnegie originally published it in the depths of the Great Depression, it has remained a must-read for good reasons.

Covering topics like going after the job you want, improving the job you have, and making adverse situations work for you, this “simple country boy” from Missouri emphasizes the interpersonal soft skills that everyone is looking for. 

He also makes it clear that the type of leadership and mentorship he’s describing isn’t revolutionary: it’s downright obvious.

While not everyone may hit it off with Carnegie’s writing style, it’s hard to ignore how solid and timeless his advice is. As a self-improvement book, it’s worth adding to your business library.

Four out of five stars.

Think Again by Adam Grant 

“Intelligence is usually seen as the ability to think and learn, but in a rapidly changing world, there’s another set of cognitive skills that might matter more: the ability to rethink and unlearn.”

In this engrossing read, organizational psychologist Adam Grant reveals that believing all our thoughts or internalizing all our emotions doesn’t have to be our norm. 

As a researcher, he’s delved into the way we as humans think, and what lies behind our fundamental assumptions about motivation, generosity, creativity, and potential. Many folks read and shared his viral article for the New York Times on languishing in 2021.

In this book, Grant invites us to release the views that don’t serve us any more and to prize traits like mental flexibility, humility, and curiosity. 

A highly recommended read!

The Simple Path to Wealth by J. L. Collins 

If you’ve ever said, “I know money is important. I just don’t want to spend my life thinking about it”–this book is for you.

Based on a series of letters written for his young daughter, J. L. Collins’s The Simple Path to Wealth is a message to anyone who’s felt overwhelmed by finances.

According to him, “money is the single most powerful tool we have for navigating this complex world we’ve created, so understanding it is critical.”

With chapters covering debt, money mindsets, and the fundamentals of investing (among other topics), Collins makes this subject both simple and approachable. Some reviewers have even compared it to sitting around a campfire, swapping stories.

The author and financial blogger keenly points out that “complex investments exist only to profit those who create and sell them. The simple approach I created for my daughter is not only easy to understand and use, it’s powerful too.”

We couldn’t agree more.

Don’t fancy yourself much of a reader? All three of these books are available in audio versions. 

Happy reading!

For more business consulting in the Brainerd Lakes Area, connect with us here.