Can we withhold accrued vacation pay if employee doesn’t give two weeks’ notice? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Can we withhold accrued vacation pay if employee doesn’t give two weeks’ notice?

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Q. Our company policy is to not pay an employee for unused vacation time if the employee resigns without giving the required two weeks’ notice. A former employee has challenged this policy and is threatening to take the company to court. Is this policy lawful?

A. If your company has a written policy that clearly states that employees will not be paid for accrued but unused vacation if they do not give proper notice then, under Minnesota law, your company can lawfully refuse to pay the employee for his or her unused vacation.

However, Minnesota courts have stated that an employee’s right to be paid for vacation time is contractual. This means that if the employee brings a legal claim, the court will look at the language of the company’s policy, and any ambiguity in the policy language will be interpreted in favor of the employee. Therefore, it’s a good idea to make sure your policy is absolutely clear.

In addition, the law on this issue varies in other states. If your company has operations outside Minnesota, you will need to make sure your company’s operations in other states are lawful.

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