Effective January 1, 2026, Minnesota law mandates that all businesses must offer Paid Family and Medical Leave (PFML) to employees. 

So, what exactly is PFML? It is a type of insurance that protects employees when the need for longer-term absences arise due to serious medical conditions (theirs or a family member’s) or to bond with a new child. “Paid leave is broken into two categories – 1) medical leave (including pregnancy or recovery from childbirth) and 2) all other leave,” explains AASPMN Lobbyist Sam Richie (Larkin Hoffman). “Workers may take up to 12 weeks per benefit year in each of the two categories, but workers who need leave from both categories will be capped at 20 weeks in a benefit year.” 

Who pays for PFML? Paid leave premiums will be funded by both employers and employees through an increase in the payroll tax. The amount paid depends on the size of the business and the individual employee’s salary. The total premium for large employers (those with more than 30 employees) will be 0.88 percent of the worker’s salary, which can be divided equally between the company and the employee; the employer is required to pay at least 0.44 percent of the premium. 

According to the 2025 AASPMN Membership Survey, over 80 percent of respondents indicated that they employ no more than 25 employees, which means the majority of association members fortunately fall into the category of “small employer” (30 or fewer employees). Under the Minnesota law, the premium for small employers is reduced to 0.66 percent with the employer paying at least 0.22 percent while employees pay up to 0.44 percent. 

Employers can begin deducting the employee portion of the tax on January 1 when the benefits become available, but the employee portion will be paid quarterly with the first payment being due on April 30, 2026, based on first quarter wages. Employers can estimate the amount of taxes they can anticipate at bit.ly/PFMLtaxcalculator. Additionally, employers are required to continue funding their portion of the employee’s healthcare insurance premiums. 

Beyond the explicit costs associated with PFML, the extended absence of a key employee can certainly be viewed as a major concern as shops may be challenged  to balance staffing on top of the ongoing technician shortage; however, because PFML pays a portion of the employee’s wages while they’re on leave, the employer is not responsible for wage replacement (though they have the option of paying the difference in wages which can further boost loyalty and retention). Employers can reallocate these funds to hire temporary assistance or to offer overtime to existing staff. Small employers can also apply for an assistance grant to help offset some of these costs with grants of up to $3,000 per leave ($6,000 per employer) available.

Although the state’s requirement admittedly adds to a business’s expenses, creating a statewide pool of shared premiums minimizes those costs in comparison to private plans which are often more cost-prohibitive. Currently, less than a quarter of Minnesota employees have access to this vital job protection with significant disparities based on certain demographics, including employer size. PFML is often omitted from benefit packages industry-wide. Only four percent of respondents to the Society of Collision Repair Specialists’ 2023 Collision Technician Survey were offered paid family leave. With shops struggling to maintain their existing workforce – and facing even greater challenges to expand it – it’s important to remember that you’re competing against other industries that have offered this vital benefit for years. Subpar benefits are often a major barrier for those considering a career in this field. 

On the flip side, offering a comprehensive benefit package has been proven to improve employee retention, ultimately increasing loyalty and productivity while reducing turnover costs, which can be particularly high for repair shops that invest so much time, energy and funding into ensuring staff is well trained. PFML is just another investment into your team, and the return on this investment is well worth it – ensuring employees feel valued by demonstrating this type of concern for their wellbeing and that of their families provides a lot of positives in the long run. There’s no denying that this industry can be particularly rough on the body, causing employees to develop physical problems that inhibit their ability to perform the tasks demanded of them. 

Even though it may be painful in the short term to lose a team member while they’re recovering from surgery, ensuring they have the ability to address their physical ailments immediately will allow them to return to work quicker than if they delay their medical needs, causing their situation to worsen; getting the care they need early may even reduce the length of their absence! On the opposite end of the spectrum, there have been cases where employees who were unable to obtain necessary medical care saw such a negative impact on their health that they decided to switch careers or retire early. 

But is it possible for an employee to abuse PFML? It’s possible…but studies show that abuse of PFML is extremely rare. Although an eligible employee can apply for leave yearly, they must meet certain qualification requirements each time, including providing medical documentation to prove their need. And in the event that fraud occurs, the penalties can be extremely expensive for the person who misused the insurance. Besides, since you’re going to do everything in your power to become an employer of choice, why would anyone on your team want to jeopardize their standing just to spend a couple weeks watching reruns of old sitcoms?!

Could PFML become an added inconvenience? Possibly. But employees are people, who come with “all the inconveniences of being human,” AASPMN Executive Director Linden Wicklund points out. But recognizing each person’s humanity allows employers to make a lot of progress in bettering the industry’s reputation. “When employers are understanding of their employees’ situations and respect the need for work/life balance, it can result in enhanced loyalty from those employees and a desire to work even harder to achieve the business goal.”

If your shop hasn’t already made plans to prepare for the rollout of PFML, the time is NOW! 

“Employers can still choose to go with a private plan on a quarterly basis; however, as previously mentioned, they will need to have coverage in place beginning January 1. If an employer wants to return to the state program after going with a private plan, they must wait until the end of their approved private plan’s coverage period (typically the plan year) and then rejoin the state program for the next year,” explains William Knopick of Gallagher, AASPMN’s endorsed health insurance broker. 

“Previous states that administer PFML have a bumpy track record of delayed payments, and we expect the experience in Minnesota to be similar,” he warned, pointing out that the state “also has zero experience processing claims, so we expect a heavy influx at the beginning of the year. Businesses should also note that certain private carriers are offering two-year rate guarantees. The state’s only guidance for next year is that the rate will not exceed 1.2 percent. We expect it to land around 1.1 percent.” Member shops can contact Knopick to learn more about the available options, (612) 412-3041 or email William_knopick@ajg.com.

Alternately, businesses must now enroll in the state’s plan (at paidleave.mn.gov) by the end of this month or face significant penalties for failing to comply with the law. The Minnesota Chamber of Commerce offers all the information needed and a plethora of resources related to PFML (available at bit.ly/MN-PFML). Additionally, AASPMN member shops can also turn to the team at Larkin Hoffman for specific advice on how to manage this at a discounted rate. 

Of course, learning to navigate PFML is only one of the ever-changing challenges related to managing the automotive and collision repair workforce. Stay tuned to future editions of AASPMN News as we explore some additional challenges shops face and how they can contend with the ups and downs of staffing.