12-03-2025 Council Packet - Laserfiche WebLink

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Employees receive a partial wage replacement with a maximum of $1,423 per week. Here is a link to a wage calculator for the MN Paid Leave program https://pl.mn.gov/resources/calculators/estimate-your-payments Examples of MN Paid Leave benefits: $50,000/year salary = $961.54 weekly wage MN Paid Leave benefit = $805.37 weekly $100,000/year salary = $1,923.08 weekly wage MN Paid Leave benefit = $1,384.98 $125,000/year salary = $2,403.85 weekly wage MN Paid Leave benefit = $1,423 (state’s maximum benefit amount) *The calculated weekly benefit amount is $1,649.40 which exceeds the max payment The MN Paid Leave program will now become the first payer when an employee takes a qualifying leave. This program has more qualifying reasons than short-term disability, so the employee’s reason for taking a leave may not be covered by STD. If the reason is the employee’s illness or injury, and the employee earns more than $104,000 per year, the employee could also apply for STD, which would then pay the amount over the state’s $1,423 max weekly benefit, up to the STD benefit maximum. Example: $125,000/year salary = $2,403.85 weekly wage MN Paid Leave weekly benefit = $1,423 (state’s maximum benefit amount) STD benefit weekly amount (66-2/3%) = $1,602.65 The employee would receive weekly benefits of $1,423 from the state and $179.65 from STD for a total of $1,602.65. The MN Paid Leave program is funded by a 0.88% payroll tax paid by both employers and employees, or only employers. The employer is required to contribute at least 0.44% of the tax and can choose to have employees pay any amount up to 0.44%, or the employer can pay the full amount. Staff originally budgeted for the city to pay the entire 0.88% tax but later learned that employees would be taxed on 0.44% since the IRS considers it a taxable benefit. Currently payroll processing of the city paying anything other than 0.44% will be extremely difficult to do. Therefore, the final 2026 budget was reduced by approximately $6,000, and the city will pay 0.44%, with the employee also paying 0.44% of their salary to fund the MN Paid Leave program. For an employee earning $75,000, they will now pay $330 per year to the MN Paid Leave program. Because STD will be the second payer for employee leaves in Minnesota starting in 2026, the cost for the city’s STD policy next year dropped 67% from the 2025 rates. The 2026 budget includes approximately $10,000 for the year, but the actual 2026 cost for the STD policy will only be $3,100. The city covers the STD costs. Employees are required to enroll in and pay for long-term disability insurance. The rates for LTD did not increase in 2025, but a 10% increase was budgeted for. The LTD premium amounts are based on salary – the employee’s contribution ranges from $16.00 - $32.50 per month. The total