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State Employment Law Articles
Article Index » minnesota » wage & hour » Minnesota Vacation Leave
Report Link Minnesota Supreme Court Issues Decision in Vacation-Pay Case.
Fredrikson & Byron, P.A. - January 10, 2008
On November 15, 2007, the Minnesota Supreme Court issued the long-awaited decision in the vacation-pay case, Lee v. Fresenius Medical Care, Inc. As you may remember, the Minnesota Court of Appeals determined last year in Lee v. Fresenius that the employee should have been paid for her accrued and unused vacation pay upon termination of employment, despite the employer’s vacation pay policy that made her ineligible for payment because she was terminated for misconduct. The Minnesota Supreme Court reversed that decision.
Report Link Minnesota Legal Update - Employers May Contractually Decide If A Terminated Employee Is Eligible To Receive Vacation Pay.
Ford & Harrison LLP - November 26, 2007
Last year, the Minnesota Court of Appeals issued a controversial decision in Lee v. Fresenius Medical Care, Inc. In the Lee case, the employer had a written policy stating that an employee would receive any earned and unused Personal Time Off (“PTO”) benefits provided: (1) the employee was not terminated for misconduct; or (2) the employee provided the company with sufficient notice regarding the employee’s voluntary resignation. The employer elected not to pay Ms. Lee her earned, but unused PTO benefits because she was terminated for misconduct. Ms. Lee challenged this policy, arguing that such earned, but unused PTO benefits constituted “wages” under Minn.Stat. § 181.13(a), and therefore must be paid at the time of her termination. The Minnesota Court of Appeals agreed.
Report Link At Long Last! The Minnesota Supreme Court Speaks on Payment for Unused Vacation Upon Termination of Employment.
Littler Mendelson, P.C. - November 21, 2007
Minnesota employers have received a long-awaited decision from the state supreme court on a vacation pay issue that has caused much confusion and has divided employers and employees. In Lee v. Fresenius Medical Care Inc., issued on November 15, 2007, the Minnesota Supreme Court held that an employer's obligation to pay out unused vacation balances upon termination is governed by its policies and contracts. In Lee, a case in which Littler Mendelson represented the employer, the court ruled that the employer's policies lawfully denied an employee's claim for unused vacation benefits when the employee was terminated for misconduct, thereby reversing the 2006 decision of the Minnesota Court of Appeals on that issue. The court also went out of its way to approve vacation policies that require employees either to use allotted vacation time or to lose the potential benefit, as well as those policies that impose caps on vacation accrual.
Report Link Minnesota Supreme Court: Employers Have Freedom to Set Terms of Vacation and PTO Policies
Gray Plant Mooty - November 19, 2007
In a November 15, 2007 decision, the Minnesota Supreme Court cleared up much of the recent confusion regarding whether unused vacation and PTO must be paid to an employee at the end of employment. In Lee v. Fresenius Medical Care, Inc., the Court held that employers have the right to determine, through their policies, when an employee is eligible to be paid for unused vacation and PTO time. This decision gives employers greater freedom to define the parameters of their vacation and PTO policies.
Report Link Minnesota Supreme Court Rules In Vacation Pay Case.
Fredrikson & Byron, P.A. - November 19, 2007
On November 15, 2007, the Minnesota Supreme Court issued the long awaited decision in the vacation pay case, Lee v. Fresenius Medical Care, Inc. In the case, the Minnesota Court of Appeals determined last year that the employee should have been paid for her accrued and unused vacation pay upon termination of employment, despite the employer’s vacation pay policy which would have made her ineligible for payment because she was terminated for misconduct. The Minnesota Supreme Court yesterday reversed that decision. In light of the Minnesota Supreme Court decision, company policy can and will determine when an individual is entitled to payment for accrued and unused vacation or payment for other accrued paid time off upon resignation or termination.
Report Link Vacation Policies in Light of a Recent Minnesota Court of Appeals Case.
Fredrikson & Byron, P.A. - December 26, 2006
As noted in our last Focus Newsletter, the Minnesota Court of Appeals recently ruled in Susan Lee v. Fresenius Medical Care, Inc. that earned vacation is a form of “wages” as defined by Minnesota statutes that require employers to pay employees earned but unpaid wages upon separation from employment. Until this ruling, Minnesota employers were not required to pay separating employees for their earned but unused vacation unless the employer agreed to do so by policy or practice. In the wake of the Susan Lee case, employers have had numerous questions regarding the legality of their vacation policies.
Report Link Vacation as Wages?
Fredrikson & Byron, P.A. - September 13, 2006
The Minnesota Court of Appeals has recently issued a decision that may have significant consequences for the handling of vacation pay. In the recent decision, Susan Lee v. Fresenius Medical Care, Inc., the appeals court determined that an employee must be paid for her accrued and unused vacation pay upon termination of employment, despite a vacation pay policy that would not allow for payment.

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