Human Resource Blog

Minnesota Vacation Pay

	Benefits
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	Termination
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Is there any Minnesota law that requires employers to pay terminated employees for accrued vacation time?

Many states including Minnesota have no law requiring companies to pay accrued vacation time to workers who are terminated. In fact, in most states, employers have the right to set up any policy about vacation time they choose, including policies regarding payment for accrued vacation. Employers are not required by law to pay benefits, including this kind.

However, it a company has a policy that workers are paid for such time, then the employer is legally obligated to honor that policy. Typically, such policies are found in employee handbooks.

A number of states, such as Oklahoma, have passed laws, requiring the employer to honor any promises made to employees. The laws are enforced by the states’ Departments of Labor. If a company handbook says the firm will pay accrued vacation time at termination, then the employer must do so, by law.

North Carolina and Indiana courts have assumed that workers are legally entitled to receive accrued vacation pay unless a company’s written policy expressly says otherwise. Policies must actually detail just what the circumstances are under which an employee won’t receive accrued vacation pay at termination.

There are nine states that require employers to pay workers for any accrued vacation time if those workers are terminated. The states are North Carolina, Massachusetts, Louisiana, Maine, California, Oregon, Rhode Island, Tennessee, and Illinois. The laws apply whether the worker quits, is fired, or is laid off.

As mentioned, many states have no laws about vacation time at all. They include Missouri, Arkansas, and Georgia.

Payment for accrued time must be consistent and non-discriminatory. In other words, if an employer pays some workers for accrued vacation time, they must pay all who are in a similar situation. If an employer pays all its workers of one race but not another the accrued time, that would be discriminatory. It is illegal to award any benefits in the workplace based on sex, color, race, religion, national origin, pregnancy, disability, or age (over 40). JH