The Minnesota Court of Appeals recently determined that an employee is entitled to be paid for earned but unused vacation time when employment ends. In Lee v. Fresenius Medical Care, Inc an employee who was terminated for misconduct argued that Minnesota Statutes Section 181.13(a) required payment of the nearly 200 hours of vacation pay she had accrued during her employment. The employer’s handbook stated that an employee who is terminated for misconduct is not eligible for payment of earned but unused vacation unless the payment is required by law. The Court of Appeals sided with the employee. It read the statute to require payment of all earned vacation despite the statement in the handbook making employees who are terminated for misconduct ineligible to receive payment for unused vacation and remanded the case for trial. What should Minnesota employers do now? Employers should ensure that personnel policies, practices, handbooks, employee contracts, and collective bargaining agreements are carefully worded to clearly state that vacation time is not earned until specific conditions are met. By controlling when vacation time is earned, employers can control when former employees are entitled to pay for unused vacation time under state law. We will continue to monitor developments and will update our clients as the issue develops. For more information, please contact the Felhaber lawyer with whom you usually work, or:
Founded in Saint Paul in 1943, Felhaber, Larson, Fenlon and Vogt, P.A. has offices in Minneapolis and Saint Paul. With over 60 attorneys, the firm serves clients in the areas of corporate and commercial law, employee benefits, employment law, estate planning, health care, intellectual property, labor law representing management, litigation, real estate, transportation law, and workers' compensation.
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Events & Information: Newsletters & Articles: News Alert to Employers - June 2006
United States Supreme Court Makes It Easier to Sue for Retaliation
