SF3885

Purpose

This bill tightens who can receive paid leave benefits under Minnesota’s Paid Leave Law by requiring valid work authorization. It updates definitions and eligibility rules so that only individuals with valid work authorization can access benefits, and it sets new financial thresholds and administrative steps for establishing paid leave benefit accounts.

Main provisions

• Covered employment (Sec. 1)

  • Defines covered employment as any work performed for wages or under a contract, regardless of the legal employment relationship.
  • Establishes how to determine if employment is covered within a calendar year (based on where the work is done and the employee’s residence).
  • Excludes certain groups from covered employment, including self-employed individuals, independent contractors, seasonal workers, and anyone without valid work authorization.
  • Allows certain excluded entities to opt in to coverage through a process determined by the commissioner, in which case employees’ services would be treated as covered employment.

• Covered individual (Sec. 2)

  • Defines a covered individual as someone who meets the financial eligibility requirements for benefits and, if applicable, is a self-employed individual or independent contractor who has elected coverage.
  • Requires the individual to have valid work authorization to be considered a covered individual.

• Employee definition (Sec. 3)

  • Defines an employee as someone who performs services for an employer.
  • Confirms exceptions: federal employees, self-employed individuals, independent contractors, seasonal employees, and anyone without valid work authorization are not considered employees under this law.

• Benefit account requirements (Sec. 4)

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

• Ineligibility for benefits (Sec. 5)

  • Clarifies when an applicant is not eligible for family or medical leave benefits, including situations where the applicant lacks valid work authorization, does not provide required eligibility information, is incarcerated, is receiving or has received unemployment benefits, or has other specified disqualifications.

Significant changes to existing law

• Eligibility tightened to require valid work authorization for receipt of paid leave benefits.
• New definitions for “covered employment,” “covered individual,” and “employee” that align who can participate in the program with work authorization status.
• Introduction of a wage-credit threshold (5.3% of the state’s average annual wage) needed to establish a benefit account.
• Potential for previously excluded employers or entities to opt in to coverage through a commissioner-defined process.
• Expanded rulemaking authority for the commissioner to further define these concepts and how they apply to individuals who do not meet standard criteria but perform services as employees to a Minnesota employer.
• Revisions apply to the Minnesota Paid Leave Law (as referenced by sections of Minnesota Statutes 2024 268B).

Implementation notes

• Administrative rules: The commissioner may adopt rules to further define covered employment, covered individuals, and related eligibility criteria.
• Financial eligibility: The bill links benefit eligibility to a specific wage-credit threshold tied to the state’s average wage, adding a quantitative bar to participation.
• Compliance and enforcement: The ineligibility provisions outline specific circumstances under which a claim for family or medical leave benefits would be denied, including lack of valid work authorization or failure to provide required information.

Overall impact

• The bill narrows access to paid leave benefits to individuals with valid work authorization, potentially reducing benefits for certain non-authorized workers.
• It introduces stricter definitions and a new financial threshold for establishing benefit accounts.
• It creates a pathway for some previously excluded employers to opt into the program, extending coverage in limited circumstances.

Relevant terms

• paid leave
• valid work authorization
• Minnesota Paid Leave Law
• covered employment
• covered individual
• employee
• self-employed
• independent contractor
• seasonal employee
• benefit account
• wage credits
• state’s average annual wage
• financial eligibility
• unemployment insurance benefits
• eligibility information
• commissioner
• rules (chapter 14)
• family or medical leave benefits