Three months into Minnesota's paid leave plan, interest still higher than expected

Demand for Minnesota's paid leave program remains higher than predicted as debate over the program's effect on companies continues to sizzle.

Officials predicted 130,000 applications for the entire year; 62,000 people applied by the end of March.

The deluge of requests is starting to lighten, state officials said, and early wrinkles in the system are getting resolved.

Small-business employers report varied experiences with the program, with some grateful for the chance to offer workers a benefit they previously couldn't afford while others bemoan the added cost and last-minute gaps that create administrative headaches.

Many employees express relief in the financial and mental freedom of paid leave with some complaining about delays in getting their applications approved, causing concerns that they would miss a window before they had children.

The program, which went into effect Jan. 1, offers paid time off from 12 to 20 weeks for serious health conditions or caring for family members, including maternity or paternity leaves. It is funded through a payroll tax.

Considering it is a new program and more people than expected have applied, it is running relatively smoothly as the state continues to refine the process, said Evan Rowe, deputy commissioner of the Minnesota Department of Employment and Economic Development (DEED).

"Our work isn't done. We're very focused on continuing to deliver additional improvements for employers, and applicants," Rowe said.

The state approved 42,750 requests and denied 19,250 as of March 31, he said.

Most denials were due to "common" errors, Rowe said, such as failing to include medical documentation, not using the correct name of an employer or filing leave requests through the state instead of with a third-party administrator that their employer uses.

"In most cases it's an honest mistake," Rowe said, noting that application reviews and identity verification processes are rigorous. To date "dozens" of fraudulent applications have been caught, he said.

Some employers, even among those who support the program, believe it puts an undue burden on them - specifically the payroll tax that funds it and the cost of covering for employees on leave.

Rowe said the state takes employee and employer "feedback really seriously" and uses it to consider future changes to the program.

Since January, feedback has led to several system improvements, including a search function for employers to find their workers by name. Another change lets employees' doctors digitally upload medical leave letters to the state.

"The paid leave law is a big change for Minnesota employers. Anytime you have a large change, there's a transition period and folks are learning to adapt to that change," Rowe said.

For example, some health care facilities say they have seen 25% to 40% staffing gaps in different departments as workers take leaves.

According to the Minnesota Hospital Association, its members are suddenly seeing a surge of leave requests for intermittent or inconsistent time off. They are also seeing "lagging application transparency and the stacking of multiple benefits" that are creating unpredictable scheduling gaps.

"Hospitals are seeing real operational strain, particularly in small departments and highly specialized roles that require extensive training and are not easily interchangeable, making them especially difficult to backfill," the association said in a statement.

The association represents most of the state's hospital systems.

Health care workers, however, were largely elated at having paid parental and caregiving leave for the first time, said Phillip Cryan, executive vice president of the SEIU Healthcare union.

As he spoke to scores of HealthPartners workers, especially parents, who were casting ballots during negotiations, many "were just over the moon at how much peace of mind it brought them to have this new benefit instead of the way it would have been if they had that kid a year ago," Cryan said.

Many businesses are starting to adjust. Rob Friend, owner of Sustainable Synergy Solutions in Eagan, said the new program allows him to offer an employee benefit he could not have afforded previously.

His company has four employees. One recently had a baby, so Friend knew coming into this year that he would face new overtime costs for his three other workers when the time came. The company helps its 250 clients implement recycling and waste reduction programs.

Friend applied for one of the DEED's newly created small-business grants. The $2,500 grant will help him pay workers time-and-a-half for the overtime they work while their co-worker takes maternity leave, Friend said.

Jacque Lee, CEO of Minneapolis-based Silva Screenprinting, said the state's new leave program pushed her to make big changes at her company, which regularly caters to national, big box retailers.

Lee participated in webinars run by DEED, took advantage of the state's hotline to ask questions and talked to tax experts before Jan. 1. The new law nudged the company to cross-train all 40 of its workers so each could perform multiple jobs across the factory floor.

That meant "we weren't so dependent on a single person to do one job," Lee said.

Today, workers who used to just package printed T-shirts can now trim embroidery products, too. Printing assistants became accredited so they can take over and operate an entire printer if needed.

That flexibility was important, Lee said, noting that most of her employees are young. She expects many will start families in a few years and apply for leave. When they do, she'll be ready, she said.

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This story was originally published April 21, 2026 at 2:04 AM.