Bill
HF 4496
The bill narrows who counts as covered employment and employees for paid leave, creating substitute/part-year definitions and allows retirees to reemploy as substitutes without aff
HF4496 (2025-2026) — Summary
Purpose and overall effect
- The bill focuses on paid leave coverage and exemptions for various categories of employees under Minnesota’s wage and hour framework. It revises definitions of “covered employment,” “employee,” and related concepts, and adds new categories (substitute employees, part-year employment) to clarify who is covered or exempt from covered employment and paid leave requirements.
- The bill also introduces a reemployment provision for retirement system members who temporarily return to work as substitute employees, and ensures annuity status is preserved during such reemployment.
Key provisions and changes
1) Redefinition of “Covered employment” (268B.01, subdivision 15)
- Covered employment: Previously defined broadly as employment for wages or under a service contract, with the employee’s annual employment consideration used to determine coverage.
- New clarifications/additions:
- Existing exclusions continue, but the bill adds explicit new categories that may be excluded (and can opt in to coverage later):
- Substitute employee (new subdivision 40a)
- Part-year employment (new concept in subdivision 32a)
- Employment by an individual covered in section 356B.015
- Part-year and substitute employees can affect whether an employee’s time is considered “covered employment.”
- The commissioner may adopt rules to further define application and establish criteria for those who do not meet the standard criteria but perform services as an employee for a Minnesota employer.
- New limits: For part-year employment, an employee may only use accrued paid leave benefits during the period they are not actively employed and working for a covered employer.
- For employees covered under 268.085, subdivision 7, accrued paid leave benefits may only be used during periods of active employment with a covered employer.
2) Redefinition of “Employee” (268B.01, subdivision 17)
- Employee is defined as an individual who performs services for an employer.
- The bill adds explicit exclusions/include-notes:
- Excludes: U.S. federal employees, self-employed individuals, independent contractors.
- New exclusions include: seasonal employees, substitute employees (new subdivision 40a), and employees covered in section 356B.015.
- The language clarifies that substitute employees and certain others are not considered “employees” for the purposes of the paid leave regime unless they fall into other covered categories.
3) New terms and concepts (added subdivisions)
- Subdivision 32a: Part-year employment
- Definition: Employment under a fixed-term contract with a required service period of less than 12 months, paid in equal monthly installments over a 12-month period, regardless of actual months/days worked.
- Subdivision 40a: Substitute employee
- Definition: A temporary employee hired to replace a specific regular employee during a defined absence, who does not acquire permanent status by virtue of the temporary service.
4) Reemployment and retirement system interaction (new 356B.015)
- Reemployment (Section [356B.015])
- A member of a Minnesota retirement plan who has separated and is receiving or applying for an annuity may return to employment to act as a substitute employee under 268B.01.
- Effect on annuity: Returning to employment under this section does not affect ongoing annuity payments. The annuity amount must not increase or decrease due to reemployment.
Procedural and timeline aspects
- Introduction date: March 18, 2026.
- The bill is referred to the Workforce, Labor, and Economic Development Finance and Policy committee for consideration.
- It includes the commissioner’s rulemaking authority under chapter 14 to implement and define the new provisions.
Potential impact and who is affected
- Employers in Minnesota: Need to assess which workers are considered “covered employment” and how paid leave interacts with part-year, substitute, and seasonal arrangements.
- Employees: Clarifies when paid leave benefits can be used (especially for part-year and substitute employees) and eligibility timelines.
- Retirement system members: Allows temporary reemployment as substitute employees without affecting annuity payments and with specific rules about annuity adjustments during reemployment.
Notes
- The bill’s language includes technical drafting changes, alignment with new definitions, and potential opt-in coverage for certain entities.
- Future amendments or rules by the state Commissioner of the Department of Labor and Industry (or the relevant agency) may further refine coverage criteria and administrative processes.
Compiled from official sources — confirm details with the bill’s official record.
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