HF3573

Purpose

• To require valid work authorization to receive benefits under Minnesota’s Paid Leave program.
• To update who counts as covered employment and who is eligible for benefits, and to set financial thresholds for establishing benefit accounts.
• To allow administrative rules and a process for entities that are currently excluded to opt in to coverage.

Main provisions

• Covered employment (definition change)

  • A worker’s entire employment for a calendar year is considered covered employment if:
  • 50% or more of that employment is performed in Minnesota, or
  • 50% or more of the employment is not performed in Minnesota or in any single U.S. state or foreign location, but some work is performed in Minnesota and the worker’s residence is in Minnesota for at least half the year.
  • Exclusions from covered employment include:
  • self-employed individuals,
  • independent contractors,
  • employment by a seasonal employee (as defined elsewhere in the statute),
  • employment without valid work authorization.
  • Entities that are excluded can opt in to coverage through a process determined by the commissioner; if they opt in, the services provided by their employees become covered employment.

• Covered individual (eligibility)

  • A covered individual is either:
  • an applicant who meets the financial eligibility requirements and has services that are covered employment, or
  • a self-employed individual or independent contractor who has elected coverage and meets financial eligibility.
  • A covered individual must have valid work authorization; those without valid work authorization are not covered.

• Employee (definition)

  • An employee is someone who performs services for an employer, of any nature.
  • Certain groups are explicitly not considered employees for this purpose:
  • employees of the United States government,
  • self-employed individuals,
  • independent contractors,
  • seasonal employees,
  • individuals without valid work authorization.

• Benefit account requirements

  • To establish a benefit account, an applicant must have wage credits equal to at least 5.3% of the state's average annual wage, rounded down to the next lower 100, and must have valid work authorization.

• Not eligible (for family or medical leave benefits)

  • An applicant is ineligible for family or medical leave benefits for a portion of a workweek in several situations, including:
  • before the leave’s effective date,
  • if the applicant fails to provide required information on ineligibility,
  • if the applicant worked for pay in that period,
  • if the applicant is incarcerated,
  • if the applicant is, currently or previously, receiving unemployment benefits,
  • or if the applicant did not have valid work authorization.

• Administrative authority

  • The commissioner may adopt rules to further define how these provisions apply and to determine criteria for covered employment for those who don’t neatly fit the definitions but work as employees for a Minnesota employer.

Significant changes to existing law

• Ties eligibility for Minnesota Paid Leave benefits to having valid work authorization, effectively excluding individuals without such authorization.
• Redefines who counts as “covered employment” and who is a “covered individual,” expanding or contracting eligibility based on where work is performed and residency, with a particular emphasis on cross-state or cross-border work patterns.
• Establishes a financial threshold (5.3% of the state’s average annual wage) for earning a benefit account, tying benefit access to wage credits.
• Introduces optional participation for previously excluded entities, via a commissioner-defined process, potentially broadening coverage if those entities opt in.
• Adds explicit not-eligible conditions related to information provision, employment status, incarceration, unemployment benefits, and work authorization.

Implications and context

• This bill narrows who can receive paid leave benefits by requiring valid work authorization, potentially reducing eligibility for undocumented workers or others without authorization.
• It emphasizes residency and cross-state work patterns to determine coverage, which could affect people with multi-state jobs or those living in Minnesota but working elsewhere (and vice versa).
• It creates a mechanism (opt-in) for certain employers or entities to bring their workers under coverage, which could increase or decrease overall program participation depending on uptake.

Terminology to watch

• Minnesota Paid Leave Law
• Covered employment
• Covered individual
• Employee
• Valid work authorization
• Wage credits
• State’s average annual wage
• Benefit account
• Not eligible
• Financial eligibility
• Opt in
• Commissioner
• Rules

Relevant Terms - Minnesota Paid Leave Law - covered employment - covered individual - employee - valid work authorization - wage credits - state’s average annual wage - benefit account - not eligible - financial eligibility - opt in - commissioner - rules - unemployment benefits - self-employed - independent contractor - seasonal employee - eligibility - ineligibility