Rochester employers: Delay paid family leave or expect dire consequences
Less than a year out from implementation of the paid family and medical leave program, the Rochester Area Chamber of Commerce warns many small businesses face economic turmoil unless lawmakers delay the controversial program by at least a year. The paid leave program was bulldozed through the DFL-controlled legislature two years ago, despite warnings of the impact of yet another burdensome tax on small businesses and staffing shortages in many areas of the state.
But the Post-Bulletin notes Rochester employers believe there’s still time to prevent certain disaster.
The law, set to take effect in January 2026, provides partial wage replacement for employees for 12 weeks to 20 weeks for medical leave, caring for a family member or safety leave. The chamber says small businesses will suffer disproportionately under its mandates.
“For many businesses, especially small businesses, which make up 80% of our over 1,200 members, the effects of Paid Family Medical Leave mandate in its current form will be crippling,” said the recent edition of “The Advocate,” the chamber’s monthly newsletter. “It is imperative that PFML’s implementation be paused by one year due to significant concerns from the business community.”
The sputtering start to the leave program hardly inspires confidence. The payroll tax funding the program has already risen 25 percent since passage before even going online. Employees and employers split the .88 percent cost, which many expect to continue to rise further.
The pressure to find and train temporary workers to fill in for staff on leave also promises to be a major concern, especially for employers in regional towns and cities with smaller workforces.
Ryan Parsons, president of the Rochester Area Chamber of Commerce, said it was “very likely” that small outfits would go out of business as a result of its mandates. Employers are already scrambling to meet workforce needs, and the law would exacerbate the problem.
He added that a business that loses an employee to paid leave will still need the work to be performed and will need to hire a replacement. But once the employee on paid leave returns to work, “you may have also brought on some great new talent. How does that work within the budget,” Parsons said.
House Republicans have passed legislation to postpone the leave program for a year. Yet there’s little indication the paid leave program’s supporters at the legislature have second thoughts about the potential economic calamity on the way.
The law’s authors argued that providing broader protections for state employees would improve maternal and child health incomes, as well as financial security. And it could encourage workers to stay in their jobs longer.
“This program is going to even the playing field,” said DFL Sen. Alice Mann of Edina. “It will keep people out of poverty and, most importantly, the program is built on a foundation that we are all worthy, that all of our experiences and life trajectories are equally important.”
The Minnesota Department of Employment and Economic Development estimates more than 130,000 employees will take advantage of the leave program annually, roughly two-thirds for medical purposes.