Minnesota paid leave program came in $70M under budget in first 6 months
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
State officials say they've seen "robust interest" in Minnesota's paid leave program since its January launch.
Why it matters: Nearly 75,000 Minnesotans took advantage of the program in the first six months, allowing them up to 12 weeks — or longer in some situations — to bond with a newborn, recover from a medical issue or care for a sick family member.
By the numbers: The state appropriated $688 million to launch the program and it's come in about $70 million under budget, according to the Minnesota Department of Employment and Economic Development (DEED).
- The state has approved about two-thirds of the 117,000 unique applications it has received, with an average weekly benefit of $1,083.
- Just over half of the 75,000 approvals have been for parental bonding.
What they're saying: DEED Commissioner Matt Varilek told reporters that his department has disproven the critics who thought the launch would be similar to the state's bungled driver's license and vehicle registration system rollout in 2017.
- "The overwhelming sentiment has been that people are appreciative for the customer service they're getting, and the effectiveness of the program," he said.
Yes, but: There are reports of new parents and people with health problems struggling to get approved for payments, often reapplying several times and waiting weeks for payment.
Plus, some small businesses, especially with limited staffing, say the administrative work and loss of employees has been onerous on their operations, according to a March survey by the Minnesota Chamber of Commerce.
That's not the case for Greg Conley, human resources coordinator for the popular Northern Waters Smokehaus in Duluth's Canal Park. He said one of his employees was injured outside of work and was able to take the leave.
- "It didn't cost our company a bunch of money," he told reporters. "We didn't end up extending weeks of sick time to this person to keep them intact, and the person was really grateful."
How it works: A 0.88% payroll tax funds the program. Employers can pay it all or split it with employees.
What we're watching: Pay attention to whether the 0.88% payroll tax generates enough revenue to sustain the program. Republicans warned of soaring costs when the Legislature approved the program in 2023.
- Other states have had to raise the tax, though Minnesota's rate is capped at 1.2% by state law.
- DEED Deputy Commissioner Evan Rowe said that the tax rate for 2027 will be announced at the end of this month, following an actuarial analysis.