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Paid leave bill clears final hurdle at Capitol

The final version of the bill cleared its final hurdle in a straight party-line vote in the Minnesota Senate.

ST PAUL, Minn. — Minnesota will have a state-run paid family and medical leave insurance system beginning in 2026, the same year that payroll deductions will kick in to pay for it.

The DFL-controlled Senate passed the final version of the bill Thursday, sending it to the desk of Gov. Tim Walz, who has pledged he will sign it. The vote came nine years after the first press conference by supporters of the bill back in 2014.

It provides for up to 12 weeks of paid family leave and/or up to 12 weeks of paid medical leave each year, with the total combined capped at 20 weeks. Workers would receive a portion of their regular pay while on leave.

Companies that offer the same or better benefits could apply to be exempted from the state program. It will be modeled after the current unemployment insurance program.

A payroll tax of 0.7% would be imposed, with at least half of it paid by the employer. That money would go to a statewide pool of funds, which will be used to pay for the leave.

Minnesotans would apply to the Department of Employment and Economic Development (DEED) to receive the payments just as they do when seeking unemployment benefit.

Senate Majority Leader Kari Dziedzic, a Minneapolis Democrat, hailed the bill as a victory for working families and small businesses that can't afford to offer paid leave on their own.

"This legislation has been carefully crafted, with input from business groups, stakeholders, and individual Minnesotans from across the state, to make sure that our program works and doesn’t leave people out in the cold."

Republicans said those payroll taxes should remain instead in the pockets of workers and businesses. They offered an alternative plan that would send tax dollars to employers to help them pay for private paid family leave policies offered by insurance companies.

"A payroll tax on the working men and women of Minnesota, is more money out of their paycheck at a time when they're paying more for everything else," Sen. Eric Pratt, a Prior Lake Republican, told colleagues.

Republicans also warned it would drive more businesses to leave the state.

"We see taillights heading west quite frequently and we need to stop that. We want to keep the people here, the workers, who want to keep the businesses here," Republican Sen. Paul Utke of Park Rapids asserted.

Sen. Erin Maye Quade, an Apple Valley Democrat, countered that Minnesotans shouldn't be forced to go to work sick or injured for fear of losing their jobs.

"This bill is about Minnesotans. It is about people who work! People who are constantly being asked to choose between healing from a caesarian or paying their rent!"

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