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As a massive fraud scandal continues to unfold in Minnesota, a new law in the state is set to take effect on Jan. 1 granting 20 weeks of paid leave, which critics say just opens the door for more fraud in the state.
The legislation, signed into law by Gov. Tim Walz, will allow 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 will be capped at 20 weeks a year for employees who take advantage of both.
“Everyone deserves paid time away from work, to heal, to grow, and to live,” Lt. Gov. Peggy Flanagan said at the signing ceremony in 2023. “This time is not optional. It’s not a nice-to-have. It’s a must-have if we truly are going to be the best state in the country to raise a family.”
The new state paid leave program is separate from, and in addition to, existing federal and Minnesota parental and maternity-leave rights, although it can run concurrently with them for the same period of time, and is being enforced by a new government agency called the Minnesota Department of Employment and Economic Development with more than 400 full-time employees overseeing the process.
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Minnesota Gov. Tim Walz sits for an interview with Star Tribune journalists in his office at the State Capitol in St. Paul on Dec. 12, 2024. (Alex Kormann/The Minnesota Star Tribune/Tribune News Service via Getty Images)
Critics on social media in recent days have expressed doubt about the safeguards put in place to prevent fraudsters from exploiting the new law given the massive scandal in Minnesota’s nonprofit and welfare programs, which prosecutors say could total $9 billion.
“In the middle of a massive fraud scandal, Minnesota Democrats are bragging about creating a new entitlement just as ripe for abuse,” Red State writer Bonchie posted on X. “The scheme involves businesses forced to pay a premium, with the state paying workers for 20 weeks of ‘paid leave.’ Are Minnesotans tired yet?”
Bill Glahn, a policy fellow at the Center of the American Experiment, who has been at the forefront of fraud coverage in Minnesota for many years, told Fox News Digital he has been “describing this as the next billion-dollar fraud.”
Glahn explained that Republicans previously refused to even hear similar proposals when they controlled the Minnesota House, but that Democrats passed the law after gaining full control, without any Republican support. Instead of using private insurance companies to administer paid leave, Glahn is faulting Democrats for creating an entirely new state-run bureaucracy staffed by hundreds of unionized government employees.
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The sun shines on the Minnesota State Capitol. (Steve Karnowski/Associated Press)
“This is going to be just like all these Medicaid programs that they start de novo, where they say, ‘Oh, we’ll probably have two or three million dollars worth of claims on this,’ and then it quickly balloons up to 100, 200 million,” Glahn said.
Glahn outlined several ways the system could be exploited, including fake companies, fake employees, minimal contributions followed by large benefit claims and multiple people claiming paid leave to care for the same relative without any realistic oversight. Because claims are tied to private homes rather than centralized locations, he argues that fraud detection is practically impossible.
Glahn also warns that individuals could work briefly, qualify, then repeatedly claim long periods of paid leave, effectively getting paid for a full year while working only part of it and explained that Minnesota has a pattern of creating new entitlement programs that attract fraudsters who quickly identify loopholes and overwhelm oversight.
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Homeland Security investigators were part of a large fraud investigation on Monday in Minneapolis following the release of a video over the weekend on alleged day care fraud. (Department of Homeland Security)
“When you build a multi-billion-dollar state benefit program with weak oversight, fraudsters line up,” Townhall columnist and prominent commentator on Minnesota fraud, Dustin Grage, told Fox News Digital. “We’ve already seen what happens in Minnesota. The paid family leave system will be a magnet for abuse.”
A spokesperson for the Minnesota Department of Employment and Economic Development told Fox News Digital that assertions about the likelihood of fraud in the new law are “not based in fact.”
“Paid Leave has launched with strong systems in place to verify identities and work histories and to detect and prevent fraud. We accept tips about potential fraud from all sources, and we investigate all reports,” the spokesperson said. “Every leave must be certified by an appropriate professional. For example, a medical provider must attest that medical leave is necessary and also must verify who they are. Identifications are verified through licensure information, certification that is required on every application.”
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Minnesota Gov. Tim Walz is facing calls to resign from GOP lawmakers in his state. (Getty)
“Employers are a key part of this as well. They will be notified of every leave application, have an opportunity to review to make sure that information looks correct and notify us of any concerns.”
Still, the rampant fraud in Minnesota touching at least 14 programs has caused major skepticism of the safeguards in place for this new law that Democrats have pushed for years.
“It’s going to be just like every other program,” Glahn told Fox News Digital.
Associated Press contributed to this report.
