Total Articles: 5
Minnesota Supreme Court Issues Decision in Vacation-Pay Case.
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.
Minnesota Legal Update - Employers May Contractually Decide If A Terminated Employee Is Eligible To Receive Vacation Pay.
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.
Minnesota Supreme Court Rules In Vacation Pay Case.
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.
Vacation Policies in Light of a Recent Minnesota Court of Appeals Case.
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.
Vacation as Wages?
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.
