Gov. Tim Walz (D-MN) is promoting a new government assistance program open to illegal immigrants in Minnesota, as he faces scrutiny for allegedly allowing statewide welfare fraud, reportedly committed primarily by Somali immigrants, to happen on his watch.
The Minnesota Paid Family and Medical Leave Program, which Walz signed into law and is publicly praising ahead of its start date on Jan. 1, will cover “undocumented workers,” according to the Minnesota Chamber of Commerce’s FAQ page.
Over a 12-week coverage period of one’s choosing, the PFML program provides payments to Minnesota residents who purportedly need time away from work for “serious health” reasons or to take care of a family member, whether an infant or an ill relative. If an individual qualifies for both medical and family leave, they can “double dip,” as the commerce chamber puts it, and take off a total of 20 weeks, or five-and-a-half months, within a single year. Claimants can also “top off” paid leave by using paid time off, sick days, and vacation hours in addition to their leave of absence, a mechanism known as “supplemental payment.”
Based on income level, program beneficiaries will receive between 55% and 90% of their regular wages while on paid leave, with a maximum amount set at the state’s average weekly wage, currently $1,423 per week.
“Are people going to abuse the program?” Walz, addressing a frequent question from critics, said at an event on Tuesday that announced applications are open for new parents. “How disrespectful to people to assume that ailing Minnesotans are scamming. That’s what I hear from [critics] all the time. I trust Minnesotans.”
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Walz insisted, “I believe they know you’re not gonna get rich, and it’s not your full salary. You’re not gonna scam and take time off.”
Saying he’s “excited” about the paid leave program, Walz continued to downplay mounting concerns, raised most recently after the City Journal reported that a criminal network operating out of Minnesota’s Somali community was stealing welfare funds and funneling the money home to Somalia, an unknown amount of which would up in the clutches of al Shabaab, a Somalia-based terrorist group with ties to al Qaeda.
Employers are required to display a PFML poster at their respective workplaces to notify employees about the paid leave program. The poster must be displayed in any foreign language that is the primary language for at least five workers.
Courtesy of the state government, these posters are available in a vast variety of languages, with more versions coming soon, including the following: Spanish, Somali, Hmong, Albanian, Amharic, Arabic, Bosnian, Chinese, Chuukese, Danish, Dari, Finnish, French, German, Haitian Creole, Italian, Japanese, Karen, Khmer (Cambodian), Korean, Laotian, Norwegian, Oromo, Pashto, Portuguese (Euro and Brazilian), Russian, Swahili, Swedish, Tagalog, Thai, Tibetan, Tigrinya, Turkish, Ukrainian, and Vietnamese.
In the lead-up to the paid leave program’s launch, the state is awarding public outreach grants to community groups supporting efforts to ensure that certain employees, employers, and self-employed individuals understand and can access PFML.
The grant program is focused on awarding proposals that emphasize “equity.” According to the application instructions, grant proposals should aim to increase awareness and access among “priority populations,” such as racial minorities, immigrants and refugees, LGBT people, and limited English proficiency speakers.
Funding for the grants comes from a portion of the annual projected PFML payments. For fiscal 2026, grants will be awarded from an available fund of $1.9 million, increasing to $3.7 million the following year.
‘The next big fraud scandal in Minnesota’
Some policy experts are raising fraud-related concerns about bad actors abusing the paid leave program, especially exploiting the minimal eligibility criteria that allow illegal immigrants to benefit from the coverage plan.
“Why are Minnesota taxpayers, which I’m one, funding people who, legally speaking, should not be in America or in Minnesota?” questioned Bill Glahn, a policy fellow at the Minnesota-based Center of the American Experiment.
Proponents of PFML, however, believe that illegal migrants should reap the rewards if they pay into the program via the payroll tax, which is split between employers and employees, whose half is deducted from their wages.
“Well, they shouldn’t be here,” Glahn said in an interview with the Washington Examiner. “I’m concerned with that, and I’m concerned with the way the fraudsters have figured out the loopholes and how to game the system.”
Glahn is predicting that the paid leave program, which applies to workers after a minimum of three months from their hiring date, will be “the next big fraud scandal in Minnesota.”
“This will be widely abused,” agreed Minnesota attorney Nathan Hansen. “If you work in a job for 90 days, you can just go get 12 weeks of paid leave by saying your friend is sick.”
The program’s stipulations broadly define who is considered a family member to include almost anyone, encompassing those “like family” that are dependent on a claimant, “even if not related by blood.” Multiple caregivers can take paid leave for the same person. They do not have to live together either. The threshold is simply an “expectation and reliance for care.” A worker can technically take 12 weeks off to supposedly care for a close companion and then claim another eight weeks for one’s own medical problem, enjoying essentially an extended 20-week paid vacation.
“There will be scams I can’t even imagine around this program,” Hansen, who previously worked for the state government, foresees. “The people that are setting up fake companies [to defraud Minnesota’s safety net system], isn’t it possible that they’d also set up a fake business and just say they have these employees, then make claims to get money?”
A recent report from the New York Times found fraudulent cases of Somali residents in Minnesota enrolling in social services programming through nonexistent entities and billing state agencies for hundreds of millions of taxpayer dollars that they then pocketed. Federal prosecutors have charged dozens of people, primarily from the state’s Somali diaspora, who are believed to be part of the sprawling fraud schemes.
Glahn likewise wondered whether there are vetting protocols in place to check if an applicant’s claim for paid leave, as well as the company employing them, is legitimate.
“Are we actually going to check to see if there’s a doctor’s note, or are we just taking people’s words for it? ‘I need 20 weeks off. My pet chihuahua is not feeling well. I feel like I need to be there for him,’” Glahn quipped.
As for oversight of the program, PFML will be administered by a newly established state agency within the Minnesota Department of Employment and Economic Development, which oversees the state’s unemployment office.
“Paid Leave provides partial wage replacement and job protection for Minnesota workers,” a DEED spokesperson told the Washington Examiner when asked about fraud risks and illegal immigrants being eligible for the program.
“Eligibility for benefits is based, in part, on wages paid to individuals working within the state. Employers report employee wages quarterly, including employees’ Social Security Number or an Individual Taxpayer Identification Number provided by the IRS,” the spokesperson said. ITIN is a tax processing number issued by the IRS for foreign nationals, including illegal immigrants, who do not have a Social Security number.
Glahn said the same sort of bureaucrats “who brought you all the other billion-dollar frauds are going to be ultimately in charge of this thing,” pressing further, “Are they going to do the due diligence?”
“Are they just going to take claims on faith?” he continued. “Minnesota’s government is run on the honor system. They seem to only do checks when the money is already gone.”
The program’s certification process is “streamlined … simple and straightforward,” the state says. Applicants must fill out a certification form, which has to be signed by a healthcare provider. Qualified certifiers for medical leave include dentists, optometrists, social workers, alcohol and drug counselors, and mental health professionals. Providers outside of Minnesota, including those practicing outside of the United States, can certify paid leave. A “serious health condition” must last at least seven days, and the days do not have to be consecutive. Simply, it requires continuing treatment, or follow-up visits to a provider’s office, totaling a week.
“It’s just so frustrating that this could have been done so many other different ways, where the fraud could have been headed off at the pass,” Glahn said. “We’re just waiting for local TV to do an exposé about how people are cheating the system, setting up fake companies, paying in the minimum and getting out the maximum benefits, and then it all vanishing overnight. It’s almost as if it was designed for fraud.”
The price on taxpayers
Through almost $800 million in seed money allocated toward the program’s startup costs, the state has been building up a nest fund from which the government can immediately start paying out claims as soon as the first of the year, even for qualifying events that occurred well before the program begins. For example, parents can seek “bonding leave” in 2026 if their child was born in the past year.
Glahn, the deputy commissioner of commerce in former Gov. Tim Pawlenty’s (R-MN) administration, sees this retroactive-claim system as another opportunity for fraud.
Payroll taxes have already been increased since the program’s passage, now at 0.88%, a considerable rise from the initial 0.7% rate originally proposed two years ago. DEED is slated to adjust the rate annually after a yearly actuarial analysis.
Glahn suspects that the state will continue to raise the tax level because officials are “grossly underestimating” the number of people applying for this benefit.
“That’s been the pattern after every new social benefit introduced,” Glahn said. “Based on that track record, they’re going to have a huge uptake. They’re immediately going to find themselves in the hole, having to raise that payroll tax again.”
Glahn, a former research consultant for the Minnesota House of Representatives, who advised the economic development and finance committees, noted that the program passed without a single Republican vote.
At the time of the paid leave law’s passage in 2023, Democrats pushed it through with full control of the state legislature and the governorship, a trifecta, despite funding concerns from their Republican colleagues and pleas to carve out exceptions for small businesses.
Nearly every employer, regardless of business size or revenue, is required to participate in the program, except for independent contractors and self-employed individuals, among others, though they are able to opt in. Individual workers cannot opt out. All employees in Minnesota’s workforce covered by an eligible company are automatically enrolled, including part-time, temporary, and most seasonal workers.
Companies with 30 or fewer employees are not exempt from paying into the program, though those small employers can qualify for a reduced premium rate of 0.66% in 2026 if their average wage is less than $107,000, or 150% of the statewide annual average.
Big businesses to benefit while small companies struggle
Hansen said the large companies, which are better equipped to take on the program’s administrative burdens, largely did not object to the program because it will “knock out their competition.”
“This is a case of regulatory capture, where the big businesses can handle it and the little businesses won’t be able to,” Hansen, a debt relief expert specializing in bankruptcy law, explained.
Hansen anticipates that the program’s economic implications will edge out many small companies that do not have the bandwidth to make accommodations for the lack of labor.
During periods of paid leave, employers must hire — and subsequently fire — someone else to temporarily replace those workers, who, all the while, are collecting compensation. The program also ensures that an employee on paid leave has a backfilled position to return to. For the time that they are gone, their jobs are protected pursuant to the state statute.
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“I don’t think any of the Democrats in the Minnesota legislature, not one of them, could be a shift manager at a convenience store. They are profoundly stupid people,” Hansen said of the state’s Democratic lawmakers, “Because a shift manager at a convenience store would know this is stupid.”
Walz’s office was contacted for comment.