HF4496 (Legislative Session 94 (2025-2026))
Various employees exempted from covered employment.
AI Generated Summary
Purpose
This bill updates how paid leave coverage applies to workers in Minnesota. It changes who is considered covered employment, creates new categories for workers, lets certain employers opt into coverage, and adds rules about retirees returning to work as substitutes without affecting their retirement payments.
Main Provisions
- Redefines who is covered employment:
- Employment is covered if, in a calendar year, 50% or more of the work is done in Minnesota, or 50% or more is not in Minnesota (but some work is in Minnesota and the worker lives in Minnesota for at least half the year).
- Some workers are explicitly excluded from covered employment, such as self-employed individuals, independent contractors, seasonal workers, substitute workers, and those already covered by a specific retirement/additional program (36B.015). Employers can opt in to coverage for workers who would otherwise be excluded.
- The state labor agency (the commissioner) can adopt rules to clarify how this coverage applies, including for workers who don’t fit the standard rules but still work for Minnesota employers.
- For part-year or split-year workers, paid leave benefits can be used only when the worker is not actively employed and working for a covered employer.
- Adds new definitions:
- Partyear employment: a fixed-term job under which service is less than 12 months and pay is issued in equal monthly installments over a 12-month period, regardless of actual months worked.
- Substitute employee: a temporary worker hired to replace a specific regular employee during a defined absence and who does not gain permanent status.
- Clarifies employee scope:
- An employee is someone who performs services for an employer, but certain groups (U.S. government employees, self-employed, independent contractors, seasonal workers, substitute workers, and those covered under the 356B.015 provision) are not considered employees for these rules.
- Optional coverage for otherwise excluded employers:
- Employers who would be excluded can choose to participate in coverage, making their workers’ services fall under the paid leave program.
- Reemployment of retirees:
- A member of an eligible retirement plan may return to work as a substitute without losing their annuity or having their annuity payments change during the period of reemployment.
- The rules ensure that returning to work as a substitute does not impact the retiree’s ongoing annuity amount.
Significance and Impacts
- Scope of paid leave coverage is narrowed by default for some workers (e.g., self-employed, independent contractors, seasonal and substitute workers) but can be broadened if an employer opts in.
- Introduces new, clearer categories (partyear and substitute employees) to govern how and when paid leave benefits can be used.
- Provides protections for retirees who return to work as substitutes, preserving their annuity during that period.
- Gives the state and employers more flexibility through rulemaking to tailor coverage to different work arrangements.
Notable Changes to Existing Law
- Adds Subd.32a Partyear employment to define a new category of employment for paid leave purposes.
- Adds Subd.40a Substitute employee to define substitute workers explicitly.
- Adjusts Subd.15 (Covered employment) and Subd.17 (Employee) to reflect these new definitions and exclusions.
- Adds a new Sec.5 (356B.015 Reemployment) to govern how retirees may return to work as substitutes and protect annuity payments during reemployment.
Relevant Terms - covered employment - paid leave benefits - partyear employment - substitute employee - opt in to coverage - accrued paid leave - Minnesota employer - employee - annuity - retirement plan (356B.01) - reemployment - return to employment - commissioner (Minnesota Department of Labor and Industry/relating agency) - rules (Minnesota Statutes chapter 14)
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 18, 2026 | House | Action | Introduction and first reading, referred to | Workforce, Labor, and Economic Development Finance and Policy |
Citations
[
{
"analysis": {
"added": [
"Clarifications and definitions surrounding 'Covered employment' for purposes of paid leave, including criteria for determining when employment qualifies as covered.",
"Provisions related to how covered employment is determined across state lines and related rules."
],
"removed": [],
"summary": "This bill amends Minnesota Statutes 2024 section 268B.01 subdivision 15 to redefine Covered employment and establish details related to determining when employment qualifies as covered for purposes of paid leave.",
"modified": [
"Subdivision 15 text is reorganized to incorporate a broader framework for what constitutes covered employment and to set up related rulemaking authority."
]
},
"citation": "268B.01",
"subdivision": "15"
},
{
"analysis": {
"added": [
"Definitions clarifying who is considered an employee, including explicit exclusions for the United States government employees, self-employed individuals, or independent contractors, and other specified categories."
],
"removed": [],
"summary": "This bill amends Minnesota Statutes 2024 section 268B.01 subdivision 17 to redefine 'Employee' and specify exclusions.",
"modified": [
"Subdivision 17 is restructured to reflect clarified exclusions and boundaries for who is treated as an employee under paid leave provisions."
]
},
"citation": "268B.01",
"subdivision": "17"
},
{
"analysis": {
"added": [
"Partyear employment means employment under a fixed-term contract or agreement with a service period of less than 12 months in a calendar year, with annual compensation paid in 12 equal monthly installments."
],
"removed": [],
"summary": "This bill adds Subdivision 32a to 268B.01 defining Partyear employment.",
"modified": []
},
"citation": "268B.01",
"subdivision": "32a"
},
{
"analysis": {
"added": [
"Substitute employee means a temporary employee hired to replace a specific regular employee during a defined period of absence and who does not acquire permanent status."
],
"removed": [],
"summary": "This bill adds Subdivision 40a to 268B.01 defining Substitute employee.",
"modified": []
},
"citation": "268B.01",
"subdivision": "40a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This bill references 268.085 subdivision 7 in relation to accrual and use of paid leave during reemployment.",
"modified": [
"Notwithstanding this subdivision, a member covered under 268.085 subd. 7 may only use accrued paid leave benefits during the time the member is actively employed and working for a covered employer."
]
},
"citation": "268.085",
"subdivision": "7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This bill references 356B.01 paragraph d in the REEMPLOYMENT provisions.",
"modified": [
"Clarifies that REEMPLOYMENT provisions operate in connection with return-to-employment scenarios described in 356B.01 paragraph d, as used in 356B.015."
]
},
"citation": "356B.01",
"subdivision": "paragraph d"
},
{
"analysis": {
"added": [
"Authorization for a member of a retirement plan listed under 356B.01 to return to employment under defined conditions, including acting as a substitute employee under section 268B.01."
],
"removed": [],
"summary": "This bill establishes REEMPLOYMENT provisions in 356B.015.",
"modified": [
"Notwithstanding other laws, the return to employment does not impact continued receipt of an annuity or the start of annuity payments, and during reemployment the annuity amount must not increase or decrease as a result of reemployment."
]
},
"citation": "356B.015",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "This bill references rulemaking authority under Minnesota Statutes Chapter 14.",
"modified": []
},
"citation": "Minnesota Statutes Chapter 14",
"subdivision": ""
}
]Progress through the legislative process
In Committee