Retroactive PFML Payments May Require Adjustments

Adjustments to salary and contributions may be required when employees receive retroactive Paid Family and Medical Leave (PFML) payments due to the supplemental pay limit for contribution reporting and/or changes to an employee’s used PTO.

Report salary adjustments of an employee’s retroactive PFML payments to PERA if the employee:

1. Started an authorized leave before they received PFML payments,
2. Used PTO during their leave,
3. Received retroactive PFML payments for the leave, and
4. Earned more than 100% of their regular average salary from hours worked + PTO + PFML.

If an employee supplemented their leave with PTO, to find the adjustment amount, use these formulas:

• Regular average salary – (PFML + salary from time worked) = PTO eligible for PERA contributions.
• Used PTO originally reported – PTO eligible for PERA contributions = PTO to back out per pay period. PFML per pay period x number of pay periods during leave = total PFML. (Total PFML / hourly wage) + unpaid hours = number of missed hours to report on the Annual Leave Report.

PFML payments are not eligible for PERA contributions, whether the payment is from the State, a private vendor, or an employer with a program like the State’s. However, PFML payments impact how much PTO an employee can use to supplement their pay. If the employee receives a retroactive PFML payment, they may have used PTO reversed. Additionally, for supplemental pay to be eligible for contributions during an authorized leave, the supplemental pay reported to PERA must not exceed an employee’s regular average salary when combined with pay for any time worked and PFML payments.  

If an employee receives a PFML payment after contributions were originally reported to PERA on supplemental pay, you must back out any supplemental pay that:

• overlaps with wages replaced by PMFL payments,
• exceeds the employee’s regular average salary, or
• was later refunded to the employee.

Refunding the employee does not automatically update PERA’s records—you must also report the adjustment to PERA and correct the associated salary and contributions.

Salary Reporting Adjustment Requirements

When earnings and contributions were originally reported in multiple pay periods, do not back out salary and contributions in a lump sum. Instead, back them out separately by paid date.  

The coverage dates on the adjustment transaction(s) must match the original coverage dates that were reported to PERA.  

• For example, if an employee had been reported with used PTO that represented 100% salary replacement, in the amounts $400 for January 1–17, 2026 and $400 for January 16–31, 2026, and later received a PFML payment for $500 covering January 1–31, 2026, you must split the $500 in earnings that you are backing out from the supplemental pay that was originally reported to PERA.
• You will report a portion of the backed-out salary with coverage dates January 1–15, 2026 and the remaining backed out salary with coverage dates January 16–31, 2026.

Adjustments must include the correct contribution amount to be backed out as well.  

• For example, if a member in the Coordinated Plan later received a $200 PFML payment for one pay period that you previously reported as used PTO, when you are backing out the $200 pay from used PTO, from the original pay period, you must also back out the corresponding $13 in member contributions and $15 in employer contributions.

Any PERA-eligible salary and contributions for the current pay period must be reported separately from any adjustment transaction(s).

Only report PERA-eligible salary on your Salary Deduction Report (SDR).  

• For example, PFML payments should not be reported on the SDR and must be reported on the Annual Leave Report if applicable.

If there are no adjustments to PERA contributions, do not report an adjustment on your SDR.

For example, if you are making an internal adjustment only, such as changing the pay codes in your system, do not include this on your SDR if there are not any adjustments to PERA contributions.

When you are unable to report adjustments through payroll because the paid date is more than 60 days ago, send a request for a Deduction in Error to eligibility@mnpera.org. Include the following details in your message:

• The original coverage dates and paid dates.
• Pay details for each affected payroll period, including:
  • the amount of pay for time worked,
  • used PTO earnings, and
  • PFML payment amount the employee received.
• The corresponding salary amounts to back out and the reason.

Questions about how to report an adjustment?

• Message us on mnpera.org/employers/contact with the topic “Contribution Reporting.” 
• Email employer.reps@mnpera.org.
• Call 651-296-3636 (toll-free at 1-888-892-7372), then select option 2 for the Account Operations team.