Business groups push back after Walz says they supported paid leave program

In a nationally televised interview, Gov. Tim Walz claimed he had the support of Minnesota’s business community in passing a new paid family and medical leave program, ruffling the feathers of prominent business leaders that tried to block the law from taking effect.

Walz appeared on “60 Minutes” on Monday evening along with Vice President Kamala Harris, the Democratic presidential nominee. Asked about policies that Walz signed into law and whether they are “dangerously liberal” as former President Donald Trump has cast them, the Minnesota governor said that efforts to fund universal school meals and put in place a paid family and medical leave program were broadly supported.

“We have a paid family and medical leave program that was promoted by the business community,” Walz said.

While some small business owners backed the proposal to set up a state-run paid leave program, a few large business groups – the Minnesota Chamber of Commerce, the Minnesota Business Partnership and the Minnesota chapter of the National Federation of Independent Business – opposed it.

Democrats approved the law in 2023 that will create a new paid family and medical leave program funded by a payroll tax paid by workers and employers. 

Beginning in 2026, workers could be eligible to take up to 12 weeks partially paid time off to care for a new baby. It would also allow them to take up to an additional 12 weeks to care for a loved one who is sick. No employee could take more than 20 weeks of the combined leave options in a year. Companies that already have equal amounts or higher leave benefits wouldn’t have to opt in to the program.

The Minnesota Chamber quickly pushed back on the new Walz comments, stressing that the trade organization backed the proposal. On the social media platform X, the group pointed to letters that dozens of business leaders sent lawmakers opposing the change.

The group said it asked that lawmakers consider an alternative that “doesn’t punish employers or significantly raise taxes on employers and employees.”

Since the bill was approved, an actuarial study found that the premiums will likely have to be higher than first envisioned to support the program. Business leaders and Republican lawmakers have raised concerns about the tax used to fund the program.

Labor groups, faith leaders, health care providers and workers who don’t get paid leave benefits through their jobs backed the proposal. They said it would let more workers take time to recover from illness, bond with children or support their families.