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When Paying Accrued "Vacation" at Termination, Labels Don't Matter [Wage & Hour FAQs]

In recent years, I have noticed a movement away from the traditional categories of “vacation” and “sick” leave and holidays to hybrids like PTO, holiday hours, and personal days. While those new categories provide greater flexibility to employees and apparent ease as to record-keeping, they also complicate the question for employers about whether those accrued leave categories have to be paid out when an employee leaves the job. Some states make it easy, like Minnesota. Back in 2007, the Minnesota Supreme Court held in Lee v. Fresenius Medical Care, Inc., that, under Minnesota law, whether benefits like accrued vacation or PTO are due is “wholly contractual.”
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