On February 5, 2015, just a few days after the introduction of new legislation to require employers to provide paid “sick and safe leave” to employees, DFL members of the Minnesota legislature introduced legislation that would also provide paid parenting and caregiver leave for employees in Minnesota. See H.F. 580. Under the bill, paid parenting and caregiver leave would be funded by new taxes on both employers and employees. The benefits would be administered by the State in a manner similar to unemployment insurance benefits.

Here’s what employers need to know about the new bill:

Which Employers Would Be Covered By the Law? The law would amend the Minnesota Parenting Leave Act (MPLA) to apply to any employer in Minnesota with one or more employees. As a result, any employer with one or more employees will be subject to the MPLA’s 12-week parenting leave requirement, Minnesota’s new pregnancy accommodation requirements, and the new paid parenting and caregiver leave requirements. Currently, the MPLA and Minnesota’s pregnancy accommodation requirements only apply to employers with “21 or more employees at at least one site.” See Minn. Stat. § 181.940, subd. 3.

Which Employees Would Be Eligible For Leave? Employees would be eligible for paid parenting and caregiver leave if they have performed at least 680 hours of work for the employer or worked for the employer for at least 17 weeks. This new definition of “employee” will also apply to the MPLA and Minnesota’s pregnancy accommodation requirements, making it easier for employees to qualify for parenting leave or pregnancy accommodations. Currently, employees are only eligible for parenting leave or pregnancy accommodations if they have worked for the employer for at least 12 months preceding the request for leave and for an average number of hours per week equal to one-half the full-time equivalent position in the employee’s job classification. See Minn. Stat. § 181.940, subd. 2.

What Types of Leave Would Be Required? The bill would amend the MPLA to require an employer to provide up to 12 weeks of unpaid leave to any employee who is: (i) a biological, adoptive, or foster parent in conjunction with the birth, adoption, or placement through foster care of a child; (ii) a female employee for prenatal care, or incapacity due to pregnancy, childbirth, or related health conditions; or (iii) caring for a family member who has a serious health condition. The employee would then be eligible to apply to receive benefits from the State for up to six weeks of any of these covered forms of leave.

How Will The Paid Leave Be Funded? To fund the parenting and caregiver leave benefits, both employers and employees will be required to contribute to a fund administered by the State. Employees will be required to pay a premium equal to 0.1% of the employee’s first $78,000.00 in yearly wages, up to a maximum of $78.00 per year. Employers will be required to deduct the premiums from the employee’s wages and pay an additional premium equal to the amount paid by the employee. After the program has been in place for two years, the Commissioner of the Minnesota Department of Labor and Industry (“DOLI”) will be required to adjust the maximum annual premium amount to account for inflation.

How Will The Paid Leave Be Administered? DOLI will administer the paid leave fund and pay benefits to eligible employees on covered parenting or caregiver leave. To obtain benefits, an employee will need to file an application with DOLI, which may require a certification from the employee’s health care provider. Employees who make willfully false statements or misrepresentations to obtain benefits may be required to repay any erroneous payments and may be disqualified from receiving benefits for up to one year.

How Much Pay Will Employees Receive While On Leave? The amount of benefits that employees will receive while on leave will vary depending on how much the employee makes in comparison to the median family income in the employee’s county. Although the current bill does not define specific thresholds, the amount of wages will vary from 66% of the employee’s weekly wage to 95% of the employee’s weekly wage, up to a maximum of $1,000.00 per week for six weeks. After the program has been in place for two years, the Commissioner of DOLI will be required to adjust these weekly benefit amounts to account for inflation.

Takeaway: Like the new paid sick and safe leave bill, the paid parenting and caregiver bill represents another potentially significant change to Minnesota employment law, which employers should continue to monitor. If you feel strongly about the proposed sick and safe leave bill – one way or the other – contact your state representatives to let them know how you feel.