New Minnesota Paid Leave Reporting in 2024

By Patrick D. Busch - Peters, Revnew, Kappenman & Anderson, P.A.

April 4, 2024

The state of Minnesota is starting a new Paid Leave program for employees who are unable to work due to serious health conditions, due to a need to care for a family member or new child, or due to certain military-related or personal-safety-related qualifying events.  Paid Leave is separate from other leave programs, such as FMLA.

As the Paid Leave law currently stands, most employees in Minnesota will be eligible for Paid Leave.  Independent contractors will not be eligible.  While Paid Leave benefits won’t be available to employees until 2026, employers’ reporting obligations begin on July 1, 2024.

Quarterly Wage Detail Reports Starting July 1, 2024

Starting July 1, 2024, Minnesota employers will be required to submit quarterly wage detail reports to Minnesota’s Department of Employment and Economic Development (DEED), the state agency that also administers Minnesota’s unemployment insurance program.  DEED will provide more information about the process for submitting quarterly wage detail reports as the July 1, 2024 date approaches.

In summary, the quarterly wage detail reports must contain each covered employee’s full name, total wages paid, and total hours worked during the past quarter.  For full-time salaried employees, the employer reports 40 hours worked per week.  For part-time salaried employees, the employer reports a “reasonable estimate” of the hours actually worked.  DEED will have discretion to require employers to break down their quarterly wage detail reports by business location and by separate business unit.

Covered Employees Included on Quarterly Wage Detail Reports

The following covered employees will need to be included on the quarterly wage detail reports:

•    Employees who performed at least 50 percent of their employment during the past calendar year within Minnesota;
•    Employees who did not perform 50 percent or more of their employment during the past calendar within any single state or Canada, but who resided within Minnesota for at least 50 percent of the past calendar year; and
•    Employees who did not perform 50 percent or more of their employment during the past calendar year within any single state or Canada, but whose employment is controlled and directed from within Minnesota.

Penalties for Failure to Submit Quarterly Wage Detail Reports

Employers who do not submit quarterly wage detail reports required will face penalties.  If a quarterly wage detail report is late, DEED will assess a “late fee” of $10 per employee, with a minimum “late fee” of $250.  If the information reported is incomplete, DEED may assess an “administrative service fee” of $25 per employee whose information is incomplete.  And if an employee is omitted from a submitted quarterly wage detail report, DEED may assess an “administrative service fee” equal to 2% of the total wages for the omitted employee.  DEED can enforce these fees through expedited court proceedings and liens on any property the employer owns within Minnesota.

Practical Considerations

It’s important for employers to identify covered employees and gather required wage information before the July 1, 2024 deadline to begin submitting quarterly wage detail reports to DEED.  Employers with employees operating in multiple states should take particular care to ensure they are properly identifying which employees are covered by quarterly wage detail reports. Also, employers should be prepared to break down their reports by business location and business unit.

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