Starting January 1, 2026, Minnesota’s state-mandated Paid Family & Medical Leave (PFML) program becomes effective, giving most employees access to paid leave for medical or family reasons. While all industries will need to prepare, construction employers could face unique challenges because of the project-based, seasonal nature of their workforce.

Minnesota’s new paid leave law states that employees will be eligible for up to 20 weeks of paid leave for their own serious health condition, bonding with a new child or caring for a family member with a serious medical condition. The new law has the potential to greatly impact seasonal employers, such as construction companies, by affording workers numerous employment protections, including the right to reinstatement after taking PFML leave. 

Guaranteed Return to Work

According to the new PFML law, employees who take leave must be returned to the same job or an equivalent position when their leave ends. Meaning they are entitled to similar pay, benefits, duties and work conditions. If an employee filled the role temporarily, the original employee has a legal right to come back. Employees on PFML leave are also entitled to any nondiscretionarypay increases they would have received if they had been continuously employed, such as cost-of-living adjustments or across-the-board raises.

The law does not however, “prohibit an employer from accommodating an employee's request to be restored to a different shift, schedule or position which better suits the employee's personal needs on return from leave, or to offer a promotion to a better position.”

Under Minnesota’s PFML law, reinstatementincludes resuming group insurance coverage without requiring a new waiting period, restoring participation in retirement and pension plans without loss of service credit or vesting status, and reinstating sick leave, vacation accruals and other benefits as if the employee had not been on leave.

All covered employees who have earned at least 5.3% of the statewide average annual wage in the past year (currently $3700) are eligible for paid leave. However, the job protections for employees begin after 90 calendar days from the date of hire.

Limitations on Reinstatement

While employees generally have a right to reinstatement after taking PFML, there are some limitations that may be particularly relevant when working on construction sites:

• No Greater Rights Than if Continuously Employed
  Employees on leave are treated as if they had been continuously working. If they would have been laid off or their position eliminated during the leave, the employer is not required to reinstate them.
• Layoffs During Leave
  If an employee is legitimately laid off while on leave due to a project ending or a workforce reduction, the employer’s obligations to continue health benefits and guarantee reinstatement also end at the time of the layoff. However, the employer must be able to prove the layoff would have happened regardless of the leave.
• Shift Eliminations or Reduced Overtime
  If shifts are eliminated or overtime hours are cut during the leave, employees are not entitled to return to those specific shifts or overtime.
• Fixed-Term or Project-Based Employment
  If an employee was hired for a specific time period or project and that term or project ends during their leave, the employer is not required to continue benefits or reinstate the employee once the work is complete.

Special Rule for Construction Employers

The return-to-work clause can be waived for employees in the construction industry covered by a collective bargaining agreement (CBA) with a construction trade union that maintains a hiring hall. However, the waiver must be specifically drafted to comply with the law which requires, among other things, that the waiver is set forth in clear and unambiguous terms.

Start Preparing Now

Although January 1, 2026 seems far away, there are several things a construction contractor can begin to consider or plan to implement as we get closer to the effective date of the paid leave statute.

• Construction contractors should start reviewing their employment policies, onboarding procedures and union agreements. If a contractor is negotiating a collective bargaining agreement, the contractor may want to negotiate a waiver.
• Supervisors, foremen and project managers need training on how to manage PFML leave requests without violating employee rights.
• Employers should review existing leave policies and make necessary changes so that FMLA, pregnancy and parenting leave and PFML align.
• Employers should consider whether they want to request an exemption from the PFML law with a private plan that covers family leave and/or medical leave.
• Employers should keep an eye out for the notices which DEED will require employers to post.

Planning ahead could save costly headaches or legal challenges.

This blog focuses only on the employee reinstatement provisions of Minnesota’s Paid Family and Medical Leave law. There are many other components of the law that employers must consider. If you have questions or need guidance, please contact Phyllis Karasov at pkarasov@larkinhoffman.com.