Governor Tim Walz Poised to Sign Paid Leave Act Into Law

(KNSI) — A bill guaranteeing paid leave for all workers in Minnesota is headed to Governor Tim Walz’s desk.

Starting in January of 2026, it will allow employees 12 weeks of paid medical leave and/or 12 weeks of paid family leave, up to 20 weeks in one year. The program is paid for by a .7% payroll premium tax on employers who do not already have a similar or longer paid leave offering in its benefits package.

The move drew the ire of groups such as the National Federation of Independent Business in Minnesota, who say small business owners can’t afford a tax hike and jobs will be lost. “When politicians micromanage small businesses, it means fewer jobs, lower pay, and less opportunity,” said John Reynolds, NFIB State Director in Minnesota. “The costs of this mandate – higher payroll taxes and bigger workforce struggles – will escalate rapidly. Small businesses are still squeezed from inflation, supply challenges, and a chronic workforce shortage that is not going away.”

According to NFIB’s most recent monthly Jobs Report, 43% of owners reported job openings they couldn’t fill, and 90% reported few or no qualified applicants for open positions.

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