Govenor Walz Approves Legislative Changes to Minnesota's Workers' Compensation Statute

On May 14, 2026, the Minnesota Legislature passed SF 3720 (Session Law Chapter 103), implementing recommendations from the Minnesota Workers’ Compensation Advisory Council (WCAC). The bill, which incorporated HF 4598, introduces significant substantive and procedural changes affecting employers, insurers, and practitioners. These include increasing PPD benefits, requiring that petitioner retainer agreements include 2024 changes regarding attorney fee caps, expanding the list of providers who may diagnose PTSD, clarifying that IME witnesses are unpaid, allowing insurers up to 90 days to reconsider and deny a claim without filing a NOID, and adding reforms to the Workers’ Compensation Reinsurance Association (WCRA). The Legislature sent the bill to Gov. Walz on May 15, and he signed it into law on May 18. (Any changes that become effective “the day following final enactment,” therefore become effective on May 19.)

1. Increases Permanent Partial Disability (PPD) Benefits
The statute significantly increases the PPD compensation schedule, resulting in higher benefits across all impairment tiers. For example, the base amount for PPD for a 3% PPD rating from $114,260 to $137,240; this will increase the amount of PPD for 3% rating from $3,427.80 to $4,117.20, an increase of $689.40. For higher ratings, the increases will be more substantial. The base amount for PPD for a 51% rating will increase from $181,965 to $218,562; this will increase the amount of PPD for 51% rating from $92,802.15 to $111,466.62, an increase of $18,664.47. Effective Date: Applies to dates of injury on or after October 1, 2026.

2. Attorney Fee Retainers
The bill changes the mandatory language in retainer agreements to make it consistent with the current contingent fee and maximum fee provisions that went into effect for dates of injury on or after 10/1/2024. The retainer agreements must clearly state that the maximum fee is 20% of the first $275,000 in compensation awarded, subject to a maximum fee of $55,000. Effective Date: Effective the day following final enactment and applies to dates of injury on or after October 1, 2024.

3. Psychiatric Mental Health Nurse Practitioners Qualified to Diagnose PTSD
The legislation expands the providers qualified to make a diagnosis of PTSD under the occupational disease provisions of the statute to include “psychiatric mental health nurse practitioners” in addition to licensed psychiatrists and psychologists. Effective Date: Applies to dates of injury on or after October 1, 2026.

4. IME Witnesses
The statute clarifies that witnesses attending IMEs are “unpaid” and that the party requesting the witness is responsible for defraying the cost of that witness. Effective Date: Effective the day following final enactment (i.e., 5/19/2026).

5. Denial/Termination Timeline Extended
An employer/insurer commencing payment of a claim who discovers the disability is not related to a compensable personal injury will have up to 90 days after receiving notice or knowledge of the injury to terminate benefits without filing a NOID. This represents a substantial increase from the current 60 day limitation. (As a reminder, if an insurer filed a NOIPLD initially admitting liability, if they change their position on compensability, they will still have to file with MN- DOLI an Amended NOIPLD denying liability.) Effective Date: Applies to dates of injury on or after October 1, 2026.

6. Decisions on Stipulated Facts
Expands adjudicators that may decide matters based on stipulated facts to include representatives of the Commissioner of the Department of Labor & Industry, in addition to compensation judges at the Court of Administrative Hearings. Decisions made based on stipulated facts must issue within 60 days of the adjudicator’s receipt of the stipulated facts. Any determinations are appealable to the Workers Compensation Court of Appeals (WCCA). Effective Date: Effective the day following final enactment (i.e., 5/19/2026).

7. Chief Judge of WCCA May Ask the Court of Administrative Hearings to Temporarily Assign Compensation Judges to the WCCA
If the number of WCCA judges available to hear a case is insufficient to constitute a quorum and retired judges are not available to meet the quorum requirement, the chief judge of the WCCA may, with the consent of the chief judge of the Court of Administrative Hearings (CAH), assign an active compensation judge from CAH to hear a case assigned to a judge of the WCCA. The legislation provides additional information regarding the power of temporary WCCA judges, how they should be paid, etc. Effective Date: Effective the day following final enactment (i.e., 5/19/2026).

8. WCRA Reforms
The bill restructures WCRA governance, clarifies member obligations, and establishes a framework for surplus distributions and deficiency assessments. Effective Dates of All Reform Provisions: Effective the day following final enactment (i.e., 5/19/2026).

If you have any questions about these changes and their impact on your claims, please contact the attorneys in our Workers' Compensation Practice Group.