Date: September 26, 2024
From: Todd Hill
Labor Mandate Implementation
I wanted to provide a quick update regarding the implementation of two new state programs that have the potential to impact your members.
Minnesota Secure Choice Retirement Program
The first is a little noticed provision adopted during the 2023 Legislative Session establishing the Minnesota Secure Choice Retirement Program. This program when fully implemented will allow employees who have no opportunity to save for retirement through an employer-sponsored retirement program to participate in a state-managed individual retirement program. Employees will have the ability to opt-in or out of the program and establish their contribution percentage. Employers only responsibility will be to remit the employees contribution to the state managed account. Employers are not required to share in the contribution.
The program is still being designed and will not be implemented any sooner than mid-to late-2025. The law prohibited the program from being implemented prior to January 1, 2025, and be implemented in phases taking no longer than two years from the date the program opens. This new mandate will only impact businesses with five or more employees.
The following link will take you to the landing page of the Legislative Commission on Pensions and Retirements. This entity is responsible for implementing the program.
https://www.lcpr.mn.gov/SecureChoice.htm
It is my understanding some payroll and financial service vendors who work with MSSA members may be providing information suggesting employers need to take some action prior to the end of the year to be in compliance. As noted on the commission’s webpage, this is inaccurate information and should be disregarded. Employers will be alerted once the program is ready to be implemented.
Paid Family and Medical Leave Act
During the 2023 Legislative Session, Minnesota became the 13th state to authorize the creation of a state-wide Paid Family and Medical Leave Program. Beginning on January 1, 2026, this new mandated benefit will allow employees to receive up to 20 weeks of paid time off when serious health conditions prevent employees from being able to work. The serious health condition is
not limited to the employee, but also provides for paid time off to care for a family member, a new child, certain military related events or issues related to personal safety. While this new benefit will not be available until January 1, 2026. However, there are a number of important dates business owners should be aware of as this program is implemented.
- October 21, 2024 – Minnesota business owners must submit their 1st Quarterly Wage Report. Forms should be like those submitted for Unemployment Insurance.
- December 2025 – Deadline for employers to notify employees about the program and benefits.
- January 1, 2026 – Individuals can begin taking leave and applying for the benefit with the Minnesota Department of Employment and Economic Development.
- January 1, 2026 – Payroll deductions begin for employers and employees (equal shares of the .88% payroll tax). The payroll tax will increase to .93% in 2029.
- January 1, 2026 – Small businesses can begin applying for grants to help cover the costs of implementing the program.
- April 2026 – 1st Quarterly Premiums are due from employers.
Information on the status of the current rulemaking along with important dates and facts about the new program can be found at the following DEED webpage.
Minnesota Paid Leave / Minnesota Paid Leave (mn.gov)
We will continue to provide updates as these programs are further developed. Please feel free to contact us with any questions.