Welcome to In Business with Almanac North.

I'm Ken Miller.

We took Thanksgiving off, so I hope you had an opportunity to spend it with family and friends.

One of the things I hope you were very thankful for was your sense of security, because that's what we're going to talk about tonight, security.

And because of the nature of this program in business with Almanac North, we're going to talk about financial security.

But before there was a realm of the land or currency to ensure your financial security, what was it that the ancients had?

Well, they really only needed two things to feel secure.

One was shelter, and the second was fire.

For the ancient Greeks, olive oil was a form of security.

During good times, you could make a lot of it, and it stored very well for times that weren't so good, and it could be used as a monetary exchange.

Then, in feudal times, the landowner took care of the surfs.

That was their security.

But it worked both ways.

If the surfs weren't being taken care of, they wouldn't work the land for the land owner.

And then we come to the first monetary form of security in this country.

And it came even before there was a country.

During the Revolutionary War, the Continental Congress passed a law that said if you were injured or disabled while fighting for your country's freedom, you would be taken care of monetarily for the rest of your life.

That brings us to the Great Depression and all of a sudden social security, a safety net for everybody, not just veterans.

It happened because it had already been taking place in 34 other countries around the world.

We were kind of late to the show.

It started in Germany in 1889 and Ado von Bismar began a first social security program and it spread around the world and finally got to America when Franklin Delano Roosevelt in 1935 signed the Social Security Act.

It's 50% paid by the employer, 50% paid by the employee.

In 1960s, we added Medicare, and another form of security.

And now tonight, we're going to talk about a new form of security in Minnesota that's been tried in other states around the country.

And we are talking about the Minnesota Paid Family and Medical Leave Act, which takes effect January 1st of 2026.

We have some special guests this evening that are going to enlighten us of how this began, how it is now being put into place, and what it means for employees throughout next year and the years to come.

It's paid, family, and medical leave.

And it's very much like social security.

The employer in most cases pays half and the employee pays their share as well.

Stay with us.

We're talking about a brand new safety net for motans and a form of security that dates all the way back to fire on tonight's episode of In Business with Almanac North.

Welcome to In Business with Almanac North.

I'm Ken Buler.

Tonight, we're taking a closer look at Minnesota's new paid family and medical leave program and what it means for employees, businesses, and the regional economy.

We'll hear from a state senator who helped shape the program and a human resources expert who can speak to how employers are preparing.

We'll also share a fascinating look back at an early form of health insurance that started right here in Duth more than a century ago.

But first, here's a conversation we had with Greg Norfleet.

He's the director of Minnesota's paid family and medical leave program on what this new initiative means for workers and employers.

Paid leave is really about making sure that people don't need to choose between financial stability and being there for themselves or the people that they love.

Uh we have two lines of coverage.

It's uh family leave and medical leave.

Medical leave is exactly what it sounds like.

It's time off to care for yourself when you have a serious healthcare condition.

And family leave is a bit broader.

It includes time to welcome a new child to your home, whether they're birth, foster care, or adoption.

time to take care of a family member with their own serious healthcare condition as well as providing support to survivors of domestic violence and sexual assault and to members of our military during an active duty deployment whether domestically or abroad.

Paid leave is kind of a combination of FMLA at the federal level, the unpaid uh job protected leave offered by the federal government and short-term disability where you receive a payment when you're out on leave.

Some of the big differences between our program and those programs uh first off we are paid.

Uh so when you are out on a leave, underpaid leave, uh you're receiving a partial wage replacement so that you are able to make ends meet while you're out.

Uh it also applies to a lot more folks.

FMLA only applies to businesses over 50.

Uh while ours does not it applies to all businesses regardless of size, all employees regardless of if they work full-time, part-time, or uh temporary.

So, it expands access to a whole different class of workers that otherwise may not have access to job protected leave or benefits when they have a qualifying event.

Under our program, small employers are those that have 30 or fewer employees and their employees earn less than 150% of the statewide average annual wage, which is about $107,000.

If your employees fit into that category, we're supporting you through a reduced premium rate.

So, instead of paying88%, you pay 66% of wages.

you can still deduct up to point44 of the employees wages.

And you'll also have access to small employer assistance funding.

Uh that's grant funding that's available to small employers when an employee goes out on leave to either hire a temporary worker, increase their existing workers wages to cover or provide other employment related costs uh in order to subsidize some of those costs.

We are an insurance program and it's split uh much like private insurance.

It's paid through premiums and those premiums are split between an employer and an employee.

uh the employer can deduct up to44% of an employees wages to fund the program and depending on their size they either pay22 or 44% to fund the employer's portion of that premium.

So the US is kind of an outlier when it comes to paid leave.

We're one of the only countries in the world without an existing uh universal paid leave program and states have been filling this gap.

Uh so we're going to be the 13th state to go live with a paid leave program.

And in other states that have uh launched a paid leave program, they've seen amazing outcomes for families, workers, and employers.

Uh we've seen improved infant health, increased educational attainment, uh increased retention of workers after having a qualifying event and small business a reduction in small business closures all as a result of having a paid leave program available.

Uh our coverage is extremely broad.

It includes most employees in the state of Minnesota, uh, including those that are excluded from programs like unemployment insurance, FMLA, or Earnick and Safe Time.

Uh, really, if you're performing services in the state of Minnesota, you're more than likely covered.

It's actually easier to talk about who's not covered, and that's independent contractors, self-employed individuals, and tribal nations are not covered under the program, but they are able to opt in to coverage if they choose to do so.

Yeah, there's three big things that employers should be doing.

First is making sure that they have their account set up with us.

Uh there's two accounts under the program, an employer account and a leave administrator account.

Second, they should be notifying their employees about the program.

Uh we have these resources available on our on our website uh that include a workforce poster as well as an individual employee notification about the program.

And then third, there's a number of decisions that you can make as an employer to help customize paid leave to the needs of your business.

And we have all of those outlined helpfully on our website.

Uh we're so proud of the work that's happening to get uh paid leave set up.

uh the team that we built, uh the organization, the technology that we built, and we're going to be ready for January 1st.

Uh we would, I think, want to express gratitude to the people of Minnesota, whether they're employers, uh healthcare providers, employees, or anybody who's just given us their opinion throughout the implementation process.

And we hope that you can see that we take that feedback seriously and that that's not going to stop on January 1st.

Uh that's just the beginning of paid leave being available for folks in Minnesota.

and we have a commitment to continue to engage with employers, employees, healthcare providers, and the rest of Minnesota to make this the best program that it possibly can be.

That was Greg Norfleet, director of the new paid family medical leave program.

He's with the Minnesota Department of Employment and Economic Development.

And this is in business with Almanac North.

In just a few moments, we'll go to our panel for more in-depth look at Minnesota's new paid family medical leave program.

Minnesota, by the way, is the 13th state to offer this type of paid leave.

Some of the earlier programs have had a difficult time of it, and there are worries here in Minnesota about similar issues.

This is a concern because this represents the newest and one of the largest new benefit programs in the Minnesota state history.

Minnesota has struggled with huge rollouts in the past.

You'll remember the state's updated vehicle licensing and title system, Minlars, that was plagued by software issues when it was released in 2017.

5 years later, when Minnesota rolled out its health insurance marketplace, there were similar difficulties and problems.

Minnesota's family and medical leave program was funded upfront by the state legislature.

That decision was a result of other earlier states underestimating the response to their programs.

Washington state started their paid leave in 2020.

They were short right from the start and had infused $200 million in the very first year.

Two months ago, the state actuarial forecast said there would be a deficit starting in 2029 that could reach a billion dollars a year.

So, they're increasing their tax starting next year to prepare for it.

Taking Washington state's experience and similar demand for programs in states elsewhere, Minnesota lawmakers have already voted for a tax increase.

They did that last year, raising the rate for next year from 0.7% to the current.88% or 66 depending on the size of your business.

The Minnesota Chamber of Commerce has expressed concerns on behalf of their members who will have to redo their company's benefit packages and the effect especially on small businesses of employers taking extended time off.

There's also the potential for abuse and fraud.

The reason to worry is due in part to the massive fraud during the pandemic and feeding our future, which resulted in over $250 million in stolen funds meant to feed children.

Similar investigations are currently underway on state programs dealing with autism and housing assistance in the Twin Cities.

Now, here to talk about this new program is our panel of special guests.

We're very pleased to have Senator Jennifer Mchuan of Duth with us.

She is chair of the Senate Labor Committee and has been involved in crafting Minnesota's paid family and medical leave program.

Also with us this evening is Justin Tersh.

He is the managing partner of Ters and Associates.

They are the leading provider of workplace and human resources consulting services in Minnesota and northwestern Wisconsin.

Senator McHune, we'll start with you.

Thank you very much for being with us.

I know you've been involved in this for a very long time, helping craft the program.

uh can you tell us what led to the program and how this is going to affect employees and their families?

Oh well absolutely thank you first of all for having us to talk about this uh roll out of this very important critical benefit that people uh deserve and need in their lives and has been a very long time coming.

Um, first of all, I have to uh say that my own involvement in the program was very much as part of being chair of the Senate Labor Committee, but this program is a result of years and years of advocacy uh from both people in the medical professions, uh people in organized labor, workers around the state, um small business owners, a number of people working toward establishing this basic benefit in Minnesota.

Finally, um, so, um, my colleague, Senator Elise Man was the lead author of this bill in the Senate, uh, Representative Cedric Frasier, uh, in the House, and they did a wonderful job, uh, throughout the session in 2023 negotiating all of the provisions of this bill, uh, meeting with the chamber, meeting with various constituencies, and just hammering it out in agreement and trying, as you said in your introduction, to be very thoughtful about how they would go about this, what what would it need uh what would it take to be successful looking at other states and their rollouts.

Um, and I I really appreciated uh in the show so far how you took us through a history of some of the social safety net benefits that we have in Minnesota and in the United States.

And as many people know, uh, here in the United States as a whole, in the nation, we don't have a paid family medical leave benefit.

Uh, we do have a guaranteed uh, a job guarantee if you you're your job will be protected if you're covered under our federal uh, family leave program, but you don't you don't necessarily get pay.

You're not guaranteed to be able to get any pay during that time.

So what that had resulted in is uh a lot of professionals and a lot of people in our economy did already receive paid uh family medical leave.

Um take time off say if you have a baby or if you have a sickness yourself or a relative and you need to care for them because larger employers or more established employers know how important and crucial that benefit is for people's lives.

So in order to be competitive uh to keep employees uh retention issues, they already offered those benefits.

But a lot of people in our society who work lower wage jobs um or for smaller businesses that that just couldn't afford to offer those benefits and couldn't compete for that.

Um so this is one of those really crucial public uh good programs um that really the rest of the developed world has enjoyed and assumed would be there for them for decades.

So really the United States is very far behind on this.

I am so grateful that here in the state of Minnesota we have worked it out and now we are seeing it come to fruition.

I'm very excited about the launch and excited to be here to talk about it.

Well thank you very much Senator.

go to you uh Justin.

What are some of the businesses that you work with uh concerned about when this rolls out?

Yeah, well I'll thank you again for having me too.

Um I think the businesses that I'm working with I think most are actually pretty excited about the opportunity to have this benefit like Senator Mchuan mentioned especially the smaller businesses.

Um some of the concerns about the program are really related to reinstatement rights which the senator kind of referenced.

So, an employee who's off for uh 20 weeks, most of those employees are going to have the right to come back to their job, which means that the employer can't hire a long-term permanent replacement.

And that's going to make it very difficult to train up temporary workers if there are temporary workers.

Uh the Minnesota State Demographer says, for instance, in northeastern Minnesota, there's going to be a six% decline in the labor pool just in northeastern Minnesota alone in this 10-year period.

And since the COVID pandemic, we've had a major labor shortage and more openings than than uh workers to fill them.

So, I think that's some of the concerns that small businesses are facing.

The federal law, of course, had a provision allowing uh for time off if you were a large employer, but the employee had to work there for a year, and this state law doesn't have that provision.

What if a small business loses a key employee?

Uh it's going to take this 20 weeks.

How do they uh how do they handle that?

Yeah, that well that's that's a big question.

Uh I know that the deed is looking at 15,000 applications in January and about 10,000 a month after uh for the rest of 2026.

Um the businesses that I talked to the most concerned about that are schools, healthc care facilities um and folks in the human services personal care world.

And so it's going to be very difficult if that one nurse practitioner at a rural clinic or hospital or the special ed teacher pair is going to be out.

So, what we've been telling our clients is to focus on planning, try to build in some redundancy, and be careful about taking on work that you're not going to be able to deliver.

We were talking about abuse a moment ago, and um what is built into this program, Senator McCun, that uh would prevent abuse of taking time that you didn't deserve?

Sure.

Well, I I I would point to a couple of things.

Um, first of all, in order to receive this benefit, you have to make application for it.

Um, and ideally, as we just heard, you're going to be talking to your employer.

You're going to be able to plan for a lot of things.

So, you know that you are going to be having a child or adopting a child, giving birth to a child, or you're, you know, you have a surgery coming up or, you know, a family member is going to need your help.

So, that gives you some time.

It gives hopefully your employer some time to make those preparations and then you make application you you fill out an application that's submitted to DED the department of u employment and economic development which is the same department that is very well-versed in handling our unemployment benefits and has been doing that very successfully for for quite some time.

Um so that first application of having to get it approved which has to be signed off on by a professional.

So, if you're having a baby, it has to be verified you are actually having a child.

If you are going to be um uh giving care to a relative, a medical professional would sign off on that and then it's approved by the state and uh so there's sort of an audit that happens at the front end of you even applying to receive that benefit.

And then just the agency that is administering this has an excellent track record in um really administering our public programs in a very responsible fiscally responsible and um uh a responsible to the people way.

So I feel very good about that.

Uh you were listening to in business with Almanac North and Justin.

Are businesses happy with that kind of protection that Senator Mchuan talked about?

Well, I think Minnesota's had a, you know, a history, as we all know, of of issues with fraud and state programs, and I don't think that'll be unique to the paid family medical leave act.

Um, I think the most important thing for people to know is the employer isn't involved in approving or denying this leave.

So, it's really up to the bureaucrats at the state to make sure that uh the the state the programs run with integrity and following the rules.

And I I think it'll be certainly be a challenge and there's some bumps in the road ahead, but I think um most employers are are hopeful but not necessarily optimistic.

We're almost out of time, but I want to get one other point in.

There is an exception for businesses in tourist areas that are seasonal.

Uh northeastern Minnesota is a tourism destination.

We've got a lot of businesses that ski hills in the winter or lake places in the summer.

Uh what is it?

There is a way to opt out, is there not?

Well, there's a there's an exemption for seasonal employers.

they have to be in the hospitality industry.

And one of the things people aren't necessarily aware of is you have to have twothirds of your gross revenue in six months of the year.

And so if you don't meet that qualification, you're not going to qualify.

And then only those employees who work less than 150 days a year are able to be exempted from the system.

So uh it's a great exemption.

It's not particularly uh broad.

So people should look into that before they hope on it.

Thank you very much.

Justin Ters is the managing partner of Tersian Associates, an employee benefit firm in northern Minnesota and Wisconsin.

Senator Mchuan from Duth, Minnesota.

We're so happy to have you.

Thank you very much for being with us this evening.

Thank you very much for having me.

We thank you both for taking the time.

An excellent discussion and as I said, Senator Mchuan represents Duth and Minnesota legislature and Justin is the managing partner of Ters and Associates, a consulting agency for businesses.

As we talk about financial security and access to healthcare, there's a look back at one of Duth's most creative solutions.

A Benedictine sister who brought an early form of health insurance to the Northland.

She came to be known as Sister Lumberjack.

Let's take a look.

This week's in business with Almanac North has focused on security and because of the name of our program in business that means financial security which is one of the reasons behind the Minnesota paid family and medical leave act which takes effect at the first of the new year.

It's to protect people because the number one reason for bankruptcy in this country is unexpected medical emergencies that keep people out of work.

Paying for health insurance has always been a problem.

In fact, it's an issue right now before the Congress in Washington DC, which as you know has shut down our government for the longest period of time in our nation's history.

And the issue is still unresolved.

What happens when the Affordable Care Act expires at the end of this year and subsidies for people to buy health insurance vanish?

Well, it's been a problem before.

In fact, it's been a problem for 137 years here in Duth.

And there was a solution, which is why we're at the College of St.

Scholastica.

In the 1880s, DUTH was going through a major growth spurt fueled by lumber and iron ore, two very dangerous professions to be in.

Bishop James McGri saw a need and asked Benedictine Sister, Mother Scholastica Kursed, to visit Duth to establish a school and start a hospital.

She initially arrived here in December of 1880.

A month later, three sisters arrived in Duth to open the first of several schools.

In 1888, they established St.

Mary's Hospital and St.

Scholastica Monastery was founded in 1892.

Following the rule of St.

Benedict, the sisters were instructed that before and above all things, care must be taken of the sick.

Oh, but that was a problem for the new St.

Mary's Hospital because not everyone needing care could afford to pay for it.

Ah, but the good sisters came up with a plan.

It took the form of a powerful woman in both stature and character.

Sister Amada Macket was on a mission.

She traveled northern Minnesota selling tickets for healthc care services.

Even in the harshest of winters, Sister Amada visited lumber camps selling tickets for $1 when it started in 1890 and increased to just $5 when the program ended in 1913.

The lumberjack ticket was good for an entire year's worth of health care at a Benedictine hospital should the need arise.

While visiting the camps, she mended socks, conducted religious services, and baked pies in the camp's cookhouse.

After that, who could say no to a sister selling this early form of health insurance.

The Benedictine's traveling insurance agent earned the nickname Sister Lumberjack.

The medical policies were then later extended to cover miners on Minnesota's glorious Iron Range.

With me at the College of St.

Scholastica is librarian and archivist Heidi Johnson.

Heidi, what's the most important thing to you about this story that makes it so inspirational about Sister Lumberjack?

Well, I've been at the college for 21 years and I've had such a good privilege of being able to learn about so many stories from the sisters uh at St.

Scholastica Monastery.

And so quite honestly, this is just one of many stories that the sisters have that really show how innovative they were, how clever, how bold, how they thought out of the box, but all to fulfill their mission.

Um, and especially when they saw a need such as, you know, what was going on up here in Duth and how they were able to fulfill that need.

So that's, you know, one of the big takeaways for me.

The other is honestly just Sister Amada.

Like I cannot imagine, you know, as a woman back then, what she did, how much courage she had to have to travel to all of those, you know, lumberjack camps and um how much she cared for the men in those camps and quite honestly that she was nicknamed then the lumberjack sister.

That just says it all.

So I think those have some really good messages for us today too as to how we are called to be courageous and to when we see a need in our own community how we need to step up and try to help uh and especially for us here at the college with living out those Benedicting values uh especially those of caring for the sick and for uh stewardship and and all of that just to build that community.

Thank you, Heidi Johnson, and thank you, College of St.

Scholastica.

This is In Business with Almanac North.

Before we wrap up tonight's in business, let's take a quick look at some of the top business stories making headlines across our region this week.

New budget forecasts from Minnesota Management and Budget offer some short-term good news, but warn of challenges ahead.

A new report released today projects a nearly $2.47 $47 billion surplus for the 2026-27 bianium.

A sign that recent tax collections and revenue flows are stronger than anticipated.

But on the horizon lies trouble.

By the 2028-29 bianium, the state could face a deficit of nearly 2.96 billion.

In downtown Duth, retailers and local businesses are facing some challenges.

Paddle North, the water sports and outdoor lifestyle store that opened this summer, has permanently closed its Duth location.

Snider's convenience store located in the holiday center and one of their original tenants has also shut its doors, removing an important stop for residents, workers, and visitors.

And Madhouse Burgers featuring Chili Billies has closed as well, adding to a growing list of retail and dining losses.

I'm Ken Buer.

Thanks for watching In Business with Almanac North.

If you missed any parts of tonight's show, you can always watch it at pbsnorth.org or listen on Mondays at 5:30 on the North 1033.

Thanks again for watching and until next time, let's take care of each other.