Walz in the hot seat as critics’ predictions on his controversial new law come true: ‘Concerning trends’

As Minnesota’s fraud scandal continues to make headlines, signature legislation signed by Gov. Tim Walz extending the amount of paid leave available to Minnesota workers is already causing major headaches and concerns from critics worried about potential abuse of even more dollars.

The legislation, which took effect on January 1, allows Minnesota workers up to 12 weeks a year off with partial pay to care for a newborn or a sick family member, and up to 12 weeks to recover from their own serious illness. Benefits are capped at 20 weeks a year for employees who take advantage of both.

Two months in, the legislation is already receiving pushback, including from the state’s largest, non-partisan business advocacy organization.

“Beyond just anti-fraud sentiments, employers are reporting a few concerning trends,” Lauryn Schothorst from the Minnesota Chamber of Commerce told Fox 9 Minneapolis.

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“Providers are being pressured by patients for the full 12 weeks of leave, even if their condition does not require it. A number of respondents have shared that their employees are making more on paid leave than the wage replacement thresholds in law. Employees are going on vacation or to music festivals while supposedly on leave. These anecdotes don’t necessarily reveal fraud or a lack of oversight by the department. They highlight concerns with the broad eligibility and limited employer recourse elements of the law. To employers, overuse is abuse.”

Two Republican lawmakers who spoke to Fox News Digital agreed with that assessment.

“The chamber is right,” State Sen. Michael Holmstrom said. “Minnesota is not a business-friendly state. Employers were already offering this benefit and then the state got in between employers and their employees, which it has no business doing.”

Holmstrom says a major employer in his district has seen a 700% increase in paid leave usage since the law took effect and the company is unable to backfill those positions with skilled workers to compensate.

The result, Holmstrom explained, is carrying on with business as usual without replacements and providing a lower level of service. 

State Sen. Mark Koran told Fox News Digital he also agreed with the chamber and suggested fraud concerns are valid, saying there will be “no real enforcement” because the “state removed the employer from the oversight and administration of the program.”

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Koran explained: “The program isn’t being used as intended, which Republicans predicted. It was sold as a replacement for short and long-term leave replacement. Now it’s a complex sick leave program with the effective date on day one, not the traditional seventh day of injury or illness.”

“The liberal use guidelines mean employees can take a day off every week, or every Monday and Friday for a long weekend. It’s a huge negative impact on employers’ ability to find substitute labor and puts Minnesota in the bottom tier of business competitiveness.”

Ultimately, Koran says the law will result in fewer jobs, lower pay, decreased benefits and a “continued exodus of business creation and expansion out of Minnesota.”

 On social media, critics have echoed similar sentiments, with some pointing out that most businesses in Minnesota already offered paid leave, making state interference unnecessary. 

“No way,” Brian McClung, former spokesperson for former Republican Minnesota Gov. Tim Pawlenty, posted on X. “I am shocked – shocked! If only someone had warned the MN Democrat trifecta that creating an expensive, cumbersome, bureaucratic system might go badly (when the vast majority of businesses already offered paid leave without a mandate).”

Fox News Digital reached out to Walz’s office for comment.

The new state paid leave program is being enforced by a new government division within the Minnesota Department of Employment and Economic Development with more than 400 full-time employees overseeing the process, causing uneasiness from some given the multiple state agency bureaucracies that oversaw the massive fraud scandal. 

Earlier this year, when the law was about to take effect, Fox News Digital reported on concerns that the bill could open the door up for even more fraud, with Bill Glahn, a policy fellow at the Center of the American Experiment, describing the legislation at the time as the “next billion-dollar fraud.”

“When you build a multibillion-dollar state benefit program with weak oversight, fraudsters line up,” Townhall columnist and Minnesota resident Dustin Grage, told Fox News Digital in January. “We’ve already seen what happens in Minnesota. The paid family leave system will be a magnet for abuse.” 

In a statement to Fox News Digital, a spokesperson for the Minnesota Department of Employment and Economic Development defended the program. 

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“Minnesota is not unique in enacting a state paid family and medical leave program – we are one of 13 states, plus the District of Columbia, that have done so. The United States is an outlier – it’s one of only seven countries worldwide that lacks a national paid family and medical leave program. The federal Bureau of Labor Statistics noted in 2023 that 73% of American civilian workers lack access to paid family leave,” the statement said. 

“We recognize that Paid Leave is a big change for Minnesota employers. That’s why we’ve worked closely with employers around the state, plus many employer advocacy groups, to develop tools and materials to make administering Paid Leave as smooth as possible. We have received positive feedback from many employers, and we are consistently improving service offerings.”

The spokesperson added that the department “takes program integrity seriously.”

“While the Minnesota Chamber of Commerce has not shared the underlying data from its survey, the Chamber has presented its objections to paid family and medical leave programs for years at the Minnesota Legislature. Despite these objections, the Chamber has been a good partner in helping educate employers about Paid Leave.”