Small business group concerned about MN law’s cost of paid family and medical leave

(KNSI) – An organization representing small businesses is concerned about the real cost of Minnesota’s Paid Family and Medical Leave Act, which went into effect this week.

The National Federation of Independent Business in Minnesota says it is disappointed with the mandate for entrepreneurs and their employees. The program is funded by a 0.7% payroll tax, and employers can pass half of that on to their employees. According to the NFIB, it will be $1.5 billion per year.

The money will be used to pay a worker who needs to take time off to care for a loved one, give birth or be ill. People can take up to five months of vacation per year.

The bill requires the state to conduct an independent study of the program by October 31. According to the NFIB, the legislation involves complex employment regulations and severe penalties for non-compliance. The group also says more money is needed to cover the costs of the program. If the report shows that the program is not financially sustainable, the Commissioner for Employment and Economic Development can increase the payroll tax to 1.2% without legislative approval.

According to the NFIB, businesses still struggling to survive after COVID-19 lockdowns can barely afford to, and there are no provisions in place to help small businesses that are already struggling to find and retain workers to replace workers lost during the downtime.


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