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As a massive fraud scandal continues to unfold MinnesotaA new law in the state is set to take effect Jan. 1, granting 20 weeks of paid leave, which critics say only opens the door to more fraud in the state.
The legislation, signed into law by the governor. Tim Waltzwill allow Minnesota workers up to 12 weeks of leave per year with partial pay to care for a newborn or sick family member, and up to 12 weeks to recover from their own serious illness. Benefits will be capped at 20 weeks per year for employees who take advantage of both.
“Everyone deserves paid time away from work, to heal, grow and live,” Lt. Gov. Peggy Flanagan said at the 2023 signing ceremony. “This time is not optional. It’s not nice to have. It’s a must if we truly want to be the best state in the country to raise a family.”
The state’s new paid leave program is separate from and in addition to existing federal and Minnesota parental and maternity rights, although it can operate concurrently with them for the same period, and is administered 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 speaks with Star Tribune reporters in his office at the state Capitol in St. Paul, Dec. 12, 2024. (Alex Kormann/The Minnesota Star Tribune/Tribune News Service via Getty Images)
Critics on social media have expressed doubts in recent days about the safeguards put in place to prevent fraudsters from exploiting the new law, given Minnesota’s massive nonprofit and social programs scandal, which prosecutors say could total $9 billion.
“Amid a massive fraud scandal, Minnesota Democrats are boasting about creating a new law just as ripe for abuse,” said Red State writer Bonchie. posted on X. “The plan involves businesses being forced to pay a premium, with the state paying workers 20 weeks of ‘paid time off.’ Are Minnesotans tired yet?”
Bill Glahn, a researcher at the Center of the American Experiment who has been at the forefront of covering fraud in Minnesota for many years, told Fox News Digital that he “describes this as the next billion-dollar fraud.”
Glahn explained that Republicans previously refused to even hear similar proposals when they controlled the Minnesota House of Representatives, but Democrats passed the law after gaining full control, without any Republican support. Instead of using private insurance companies to manage paid leave, Glahn blames Democrats for creating an entirely new state bureaucracy staffed by hundreds of unionized government employees.
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The sun shines on the Minnesota State Capitol. (Steve Karnowski/Associated Press)
“It’s going to be like all these Medicaid programs that they launch de novo, where they say, ‘Oh, we’ll probably have two or three million dollars in claims on this,’ and then it will quickly balloon to 100, 200 million,” Glahn said.
Glahn described several ways the system could be exploited, including fake companies, fake employees, small contributions followed by large benefit claims, and multiple people claiming paid leave to care for the same parent without any realistic oversight. Because the claims are tied to private homes rather than centralized locations, he says fraud detection is virtually impossible.
Glahn also warns that individuals could work briefly, qualify, then repeatedly claim extended periods of paid leave, and actually be paid for a full year while only working part of it. He said Minnesota has a history of creating new benefit programs that attract fraudsters who quickly identify loopholes and overwhelm oversight.
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Homeland Security investigators participated in a large fraud investigation in Minneapolis on Monday, following the release of a video over the weekend of alleged fraud at day care centers. (Department of Homeland Security)
“When you build a multibillion-dollar public benefits program with weak oversight, the fraudsters line up,” Townhall columnist and prominent commentator on Minnesota fraud Dustin Grage told Fox News Digital. “We’ve already seen what’s happening 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 claims about the likelihood of fraud in the new law are “not based in fact.”
“Paid leave was launched with robust systems in place to verify identities and employment histories and to detect and prevent fraud. We accept information about potential fraud from any source and investigate all reports,” the spokesperson said. “Each leave must be certified by an appropriate professional. For example, a medical provider must certify that medical leave is necessary and must also verify who they are. Identifications are verified using licensure information, certification required for each request.”
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Minnesota Gov. Tim Walz is facing calls for resignation from his state’s Republican lawmakers. (Getty)
“Employers also play a key role in this process. They will be informed of each leave request, have the opportunity to verify that the information appears correct and notify us of any concerns.”
Yet widespread fraud in Minnesota affecting at least 14 programs has sparked major skepticism about the safeguards in place for this new law that Democrats have been pushing for years.
“It will be like any other show,” Glahn told Fox News Digital.
The Associated Press contributed to this report.
