What Minnesota Families Hiring or Already Employing a Nanny or Household Staff Need to Know About New Tax Laws Coming January 2026
- Rachel Tepley
- Nov 13
- 8 min read
Updated: Nov 16
Last Updated: November 13, 2025
Disclaimer
The information in this blog is provided by Nurturing Nannies for general educational purposes only and does not constitute legal, tax, payroll, or employment-law advice. While we aim to keep the content current, laws and regulations (including those in Minnesota) may change or be interpreted differently depending on the facts of your situation. You should not act or rely on this information without first consulting a qualified legal, tax, or payroll advisor. Nurturing Nannies disclaims any liability for actions you may take or fail to take based on this blog’s content.
My goal with this post is to equip Minnesota families who employ a nanny or household staff with clear, up-to-date guidance on critical labor-law changes. So you can feel confident, informed, and fully supported in your employer role. So without further ado, let’s get started!
- Rachel
At Nurturing Nannies we believe that compliance and fair pay should be simple for families hiring household staff. When you hire a nanny through us, we manage payroll, taxes, and employment compliance so you don’t have to worry about them and we’re just as committed to educating families who are managing household staff on their own! That’s why we’ve partnered with Poppins Payroll, a full-service, nationwide payroll provider for household employees. Any family can use promo code NURTURING (all capitals) to receive two months free, then only $49/month after that, with no contract. We’re passionate about making legal, fair pay affordable and accessible for every family.
Introduction:
If your family employs a nanny or other household staff in Minnesota, whether full-time, part-time, or through a referral-based placement agency (if you went through an employment-based agency like Nurturing Nannies you don’t have to worry about this, it’s the agency’s responsibility), knowing the latest Minnesota nanny tax laws is essential for staying compliant and informed.
Here are the laws/changes:
Minnesota’s Earned Sick and Safe Time (ESST) — already in effect but updated July 1, 2025
The new Minnesota Paid Leave Program (effective January 1, 2026)
The updated Meal and Rest Break Requirements (also effective January 1, 2026)
Being proactive now ensures your household staffing remains compliant, professional, and aligned with the high standard your family expects. For a complete list of your tax obligations, as a Minnesota household employer, check out the guide created by Poppins Payroll HERE.
1. Minnesota Nanny Tax Laws: Earned Sick and Safe Time (ESST) – Effective January 1, 2024 / Policy Updated July 1, 2025
ESST (Earned Sick & Safe Time) requires Minnesota employers to provide paid “sick and safe” time for eligible employees to use for illness, preventive care, caring for a family member, domestic abuse, sexual assault, stalking, or public-emergency closures.
Employees accrue 1 hour of ESST for every 30 hours worked, up to a maximum of 48 hours per year, unless the employer agrees to a higher amount. In many households this means that simply offering 3-5 “sick days” may no longer satisfy the law. It's also important to note that sick days and paid time off are considered two separate categories now.
Tip: For families who worry that their nanny or household staff might use sick time when they seem perfectly healthy, especially if you’ve built a strong relationship and your caregiver handles mild colds without taking leave, we recommend adding a payout clause option in your contract: “At the end of the year or contract term the employer will pay out unused sick hours earned.” This clause signals to your nanny that you value their reliability you don’t expect them to use sick time unnecessarily and you reward their dedication.
It is equally important to have a backup care plan. Whether you partner with an agency or build your own list of trusted stand-in sitters or nannies having coverage in place removes pressure from your caregiver to you and your children. When your nanny is genuinely ill they should feel comfortable taking time off without fear of letting you down or jeopardizing their role. Letting them know that “it is okay to get sick” builds trust prevents burnout and supports a sustainable working relationship.
What You Need To Know About ESST:
An employee is someone you anticipate will work at least 80 hours in a year, and is not an independent contractor. Household workers such as nannies, family assistants and household managers are classified as employees under the federal Fair Labor Standards Act (FLSA), not independent contractors.
A Newborn Care Specialist (NCS) can legitimately work as an independent contractor but only when they operate their own business entity, set their own schedule, and offer services as an expert. However, if the specialist is integrated into your household, you direct their hours or tasks, and they work primarily for your family, as many nannies do, then it is far safer to classify them as a household employee (W-2) to avoid misclassification risks, more on that HERE.
Unused hours must carry over, until a cap of 80 hours (unless you offer more generous benefits).
If your nanny meets the threshold (80 hours/year) you must track and provide ESST. (Poppins Payroll can do this for you if you're employing a nanny yourself)
Policy updates took effect July 1, 2025, including required notice and documentation changes for leave usage.
For more information, visit the Minnesota Department of Labor and Industry (DLI) ESST home page. Or check out their Household Employer ESST Compliance Checklist.
2. Minnesota Nanny Tax Laws: Minnesota Paid Leave Program (Effective January 1, 2026)
What it is: Starting January 1, 2026, Minnesota Paid Leave will offer payments and job protections to people who need time away from work for their own health or to care for a family member. Paid Leave helps Minnesotans stay financially stable while caring for their own well-being or being there for their loved ones.
Key Employer Obligations You Should Be Aware Of:
Coverage/Eligibility: Applies to nearly all Minnesota employers and nearly all employees (full-time, part-time, temporary) who meet the eligibility criteria.
Premiums & Funding: In 2026 the standard premium rate is 0.88% of taxable wages for employers with 30+ employees; a reduced rate of 0.66% applies for small employers (fewer than 30 employees, private households fall into this category). Employers and employees typically split the contribution, so each one contributes 0.33%.
Benefit amounts: Up to 12 weeks of paid medical leave and up to 12 weeks of paid family leave in a benefit year; up to 20 weeks combined if both apply.
You must notify the employee about the Paid Leave program, post the required notice, and ensure payroll systems can deduct the employee portion and remit employer premiums starting Jan 2026.
You cannot deny a qualified application, are not required to approve the leave beyond verifying eligibility, and you must allow the employee to return to their job (or an equivalent) if they’ve been employed for at least 90 days.
When Can They Take Leave?
Employees may take leave for:
Medical reasons: serious personal health conditions, childbirth, related surgery/treatment
Family reasons: bonding with a new child through birth/adoption/foster, caring for a family member, military family leave, safety leave for domestic violence/sexual assault/stalking
How Paid Leave is Applied
Eligible household staff apply for Minnesota Paid Leave Act via the official state portal at Minnesota Department of Employment and Economic Development (DEED) or, if applicable, through the employer’s approved private-plan partner.
Employers are responsible for creating an Employer Account, designating a Paid Leave Administrator, providing required notices, and ensuring payroll systems are set up.
However, they do not approve or deny leave.
In short: the nanny or household employee initiates the leave request; your role as the employer is to ensure you’re prepared and aligned with the process.
3. Minnesota Nanny Tax Laws: Meal and Rest Break Law Amendments (Effective January 1, 2026)
Beginning January 1, 2026:
Rest Breaks: Employers must allow employees working for every four consecutive hours a paid rest break of at least 15 minutes or enough time to use the nearest convenient restroom, whichever is longer.
Meal Breaks: Employers must allow employees working six or more consecutive hours a 30-minute meal break (previously the law required “sufficient time” for a meal if eight or more hours). This break is unpaid but ONLY if the employee is FULLY relieved of duties (meaning that the nanny/manny is able to leave the house, etc.), this is EXTREMELY rare in the nanny world, which means lunch should typically be paid time.
I would also recommend encouraging your nanny/manny to take time to relax/regroup when the kids are having down time or taking a nap. If you’re expecting your nanny to do chores and things while the kid naps then you are probably misclassifying your needs and should be giving your nanny a family assistant/household manager title and paying them the appropriate rate. Click HERE to see a list of what you should and should not expect your nanny to do.
If required breaks are not provided, the employer may be liable for the break time at the employee’s regular rate of pay plus an additional equal amount as liquidated damages
Pulling it Together: What Your Family Should Be Doing Now
Review your current nanny or household staff contracts/work agreements. Does it incorporate ESST accrual? Have you clearly communicated accrual, usage, and tracking?
By the end of 2025 (or sooner): Prepare for the Paid Leave law. Decide whether you’ll use the state plan or a private plan (most households will participate in the state plan), understand how you’ll handle premiums, update your payroll system, and plan to notify your nanny/household staff per compliance.
Communicate transparently with your nanny/household staff: Let them know you value their contributions, understand their rights, and are proactively meeting legal obligations so the working relationship is stable, professional, and respectful.
Consider engaging your tax, payroll or employment advisor (or Poppins Payroll) to confirm your household employment classification (employee vs contractor), payroll, benefits and compliance set-up are fully aligned with these changes.
Document everything: accrual logs, notices provided, scheduling policy, internal compliance review, having a clear file now will avoid scrambling later.
Incorporate meal/rest break obligations into scheduling, especially for shifts of six or more hours or any four-hour continuous block without a break.
How We Can Support You
At Nurturing Nannies, based in Minneapolis-St. Paul, Minnesota, we take the stress of household employment compliance off your plate. If your nanny takes leave under the Minnesota Paid Leave program, we’ll locate a backup nanny for you at no extra charge, so your household remains covered seamlessly. (You remain responsible for the hourly rate of the backup nanny.)
We offer flexible support tailored to Minnesota families, choose the level of support that works for your family:
Full Employment Management / Takeover: If you’re loving your current nanny but the employer side is overwhelming, we can step in. We’ll transition your nanny under our employment model. Handling/creating contract(s), getting them set up on our payroll, making sure everyone is compliant, and giving both you and your nanny access to our full suite of agency resources.
Backup / Temporary Care Only: Already managing your nanny employment and don’t feel stressed at all? No problem! We can also provide vetted backup or temporary nanny care when your regular nanny is unavailable. Giving you peace of mind without changing your current employment structure.
Full Search & Placement: Just getting started with your search but overwhelmed? Let us manage the entire process for your Minnesota household and take that stress off your plate. From role definition and sourcing candidates to background checks, interviewing, and securing your ideal nanny. We ensure you’re matched with someone aligned with your family’s values and schedule, so you can feel confident from day one.
While we strive to arrange a backup nanny as quickly as possible, placement depends on availability and cannot be absolutely guaranteed.
Keeping your household staffing compliant and professional doesn’t have to be stressful. With Minnesota’s ESST, Paid Leave and meal/rest break amendments now in view, a little preparation today ensures smoother operations tomorrow. Whether you need full-search support, employment management, or backup care, Nurturing Nannies is your Minnesota-based partner through all of this. Let’s make your nanny arrangement work for your family and your caregiver.
Contact Nurturing Nannies Today to Get Started
Call or Text: 763-283-8752 (please text or email us for fastest response, or leave a voicemail and we’ll call you back as soon as we can)
Email: info@nurturingnannies.us
Based in Minneapolis-St. Paul, Minnesota. Proudly serving families across Minnesota.
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