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A massive fraud scandal continues to unfold in MinnesotaOn Jan. 1, a new law will take effect in the state providing 20 weeks of paid leave, which critics say simply opens the door to more scams in the state.
Bill signed by the governor. Tim Waltzwould allow Minnesota workers up to 12 weeks a year of partially paid leave to care for a newborn or sick family member, and up to 12 weeks to recover from their own serious illness. Benefits will be limited to 20 weeks per year for employees who take advantage of both benefits.
“Everyone deserves paid time away from work to heal, grow and live,” Lieutenant Governor Peggy Flanagan said at the 2023 signing ceremony. “This time is not mandatory. It's not nice to have. This is necessary if we are truly going to be the best state in the country to raise a family.”
The state's new paid leave program is separate from and complements existing federal and Minnesota parental and maternity leave rights, although it can run concurrently with them for the same period of time, and is enforced by a new government agency called the Minnesota Department of Employment and Economic Development, overseen by more than 400 full-time employees.
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Minnesota Gov. Tim Walz speaks to the Star Tribune at his office at the State Capitol in St. Paul on Dec. 12, 2024. (Alex Cormann/The Minnesota Star Tribune/Tribune News Service via Getty Images)
Critics on social media have raised doubts in recent days about protections put in place to prevent scammers from taking advantage of the new law, given the massive scandal at Minnesota nonprofit and social programs that prosecutors say could total $9 billion.
“In the midst of a massive fraud scandal, Minnesota Democrats are boasting about creating new rights just as ripe for abuse,” Red State writer Bonci published on X. “The scheme involves businesses having to pay insurance premiums, with the government paying workers 20 weeks of 'paid holiday'. Are Minnesotans tired yet?
Bill Glahn, a fellow at the Center for the American Experiment who has been at the forefront of covering the Minnesota scam for years, told Fox News Digital that he “describes this as the next billion-dollar scam.”
Glahn explained that Republicans previously refused to even hear such proposals when they controlled the Minnesota House of Representatives, but Democrats passed the legislation after gaining full control, without any Republican support. Instead of using private insurance companies to provide paid leave, Glahn accuses Democrats of creating an entirely new government bureaucracy staffed by hundreds of unionized government workers.
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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 when they start over, where they say, 'Oh, we'll probably have two or three million dollars in claims on this,' and then that number quickly grows to 100, 200 million,” Glahn said.
Glahn outlined several ways the system could be exploited, including shell companies, bogus employees, minimum contributions followed by large benefit claims, and scores of people claiming paid leave to care for the same relative without any realistic oversight. Because the claims involve private homes rather than centralized offices, he argues that detecting fraud is nearly impossible.
Glahn also warns that people can work for a short time, qualify, and 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 benefit programs that attract scammers who are quick to identify loopholes and suppress oversight.
Department of Homeland Security investigators were involved in a major fraud investigation Monday in Minneapolis following the release of a video over the weekend of alleged daycare scams. (Department of Homeland Security)
“When you create a multibillion-dollar government benefit program with little oversight, scammers line up,” Townhall columnist and prominent Minnesota fraud commentator 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 potential for fraud in the new law are “not based on fact.”
“Paid Leave launched with robust systems to verify identity and employment history, and to detect and prevent fraud. We accept reports of potential fraud from all sources and investigate all reports,” the spokesperson said. “Each leave must be certified by an appropriate specialist. For example, a health care provider must certify that sick leave is necessary and must also certify who the provider is. Identification is verified through the license/certification information required for each application.”
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Minnesota Gov. Tim Walz is facing calls to resign from GOP lawmakers in his state. (Getty)
“Employers also play a key role in this. They will be notified of each leave application, given the opportunity to check to ensure the information appears correct and notify us of any issues.”
However, rampant fraud in Minnesota, affecting at least 14 programs, has led to widespread skepticism about the safeguards included in this new law, which Democrats have been pushing for years.
“It will be just like any other program,” Glan told Fox News Digital.
The Associated Press contributed to this report.
