Minnesota’s Paid Family & Medical Leave (PFML) program officially begins January 1, 2026, and many small business owners are asking the same question:
“Where do I even start?”
PFML is not just an employee benefit. For employers, it introduces new payroll deductions, reporting requirements, employee notices, and account registrations that
must be completed before 2026 to avoid penalties or compliance issues.
This guide breaks PFML down from the employer side, step by step, so small businesses can understand exactly what is required and how to prepare.
What Is Minnesota Paid Family & Medical Leave (PFML)?
PFML is a state-run program that provides employees with paid time off for qualifying family or medical reasons, including serious health conditions, bonding with a new
child, caring for a family member, or certain military-related events.
While employees apply for and receive benefits directly from the state, employers are responsible for setting up payroll, withholding premiums, submitting reports, and providing required notices.
When Does Minnesota PFML Start?
January 1, 2026 is the official launch date.
Before that date, employers must complete setup tasks and notify employees. Key deadlines include:
- By December 1, 2025: Employers must provide PFML notices to all current
employees - January 1, 2026: Payroll deductions begin
- April 30, 2026: First PFML premium payment is due, covering wages paid
January through March 2026
Who Has to Comply With PFML?
PFML applies to:
- Nearly all Minnesota employers
- Employees earning wages in Minnesota
- Both full-time and part-time employees
- Small businesses and large businesses, with different premium rules
Some employers may qualify to apply for an equivalent private plan, but most will use the state plan.
Step 1: Set Up the Required Employer Accounts
This is the most important starting point.
PFML requires two connected accounts, both of which must be set up correctly.
Employer (UI) Account at uimn.org
This account is used to:
- File quarterly wage detail reports
- Pay PFML premiums
- Designate a Paid Leave Administrator
Most employers already have a UI account, but it must be reviewed and updated for PFML.
Paid Leave Administrator Account at paidleave.mn.gov
This account allows the designated administrator to:
- Access Paid Leave information
- Respond to state requests
- Manage PFML-related actions when employees apply for leave
The administrator must first be designated in the UI system before this account can be activated.
Step 2: Understand PFML Premiums and Contribution Splits
PFML premiums are based on employee wages, up to the Social Security wage cap.
2026 Premium Rates
- Regular employers: 0.88 percent total premium
- Small employers with 30 or fewer employees: 0.66 percent total premium
How the Cost Is Split
Employers may deduct up to half of the premium from employee wages. The remaining portion is paid by the employer.
Each business must decide:
- How much of the premium will be deducted from employees
- How much the employer will cover
- How this decision will be documented and communicated
This choice directly affects payroll setup and employee notices.
Step 3: Update Payroll Systems Before January 2026
Payroll systems must be updated so PFML deductions are handled correctly from the first payroll of 2026.
This includes:
- Creating the PFML employee deduction
- Tracking the employer portion of the premium
- Ensuring deductions do not reduce wages below minimum wage
- Testing payroll calculations before January
Many payroll issues arise when PFML is added too late or set up incorrectly.
Step 4: Meet the Employee Notice Requirements
PFML requires two types of employee notifications, both of which must be documented.
Workplace Poster
Employers must display the official PFML poster in a location where employees can easily see it.
Individual Employee Notice
Each employee must receive a PFML notice:
- By December 1, 2025 for current employees
- Within 30 days of hire for new employees
- In English or the employee’s primary language
Employers must keep proof that each employee received the notice, such as a signed acknowledgment or electronic confirmation.
Step 5: File Quarterly Reports and Pay Premiums
PFML reporting follows a quarterly cycle.
The process works as follows:
- Employers submit a quarterly wage detail report through the UI system
- The system calculates PFML premiums owed
- Employers submit payment electronically
Even if no PFML wages were paid during a quarter, reporting may still be required.
Step 6: What Happens When an Employee Takes Paid Leave?
When an employee needs PFML:
- The employee notifies the employer
- The employee applies for benefits through the state
- The Paid Leave Administrator may receive requests or notifications
- The state reviews the application and issues a determination
Employers must also follow rules related to: - Job protection eligibility
- Continuation of health insurance benefits
- Non-retaliation and non-interference
Step 7: Align PFML With Internal Policies
PFML should be coordinated with existing company policies, including:
- PTO and sick leave
- Intermittent leave tracking
- Benefit continuation procedures
- Employee communication processes
Clear policies help prevent confusion when leave requests arise
How Prudent Supports Minnesota Small Businesses With PFML
Many businesses prefer expert guidance to ensure full compliance and avoid penalties. To make this transition smooth, Prudent is offering a comprehensive PFML
Compliance Service.
PFML Compliance Checklist
- Notification (1): Hang the required workplace poster
- Create Employer (UI) Account: Register at uimn.org
- Designate a Paid Leave Administrator within the UI account
- Create an Administrator Account at paidleave.mn.gov
- Determine the PFML premium split between employer and employees
- Notification (2): Obtain employee signatures on the PFML acknowledgment form
- Update Payroll System with finalized premium split ratios
- Customized HR Policy updates for notifications, intermittent leave, and benefits
- Ongoing management of the Paid Leave Administrator account
Prudent Accountants is here to make your PFML transition simple, compliant, and stress-free.
If you would like help setting up PFML or want to learn more about the PFML Compliance Package, please contact us here!