Navigating the Minnesota employee separation process for the first time can be daunting. Employee termination laws vary from state to state, so it’s important to make sure you’re following the right processes.
This employee separation checklist and guide offers an overview of Minnesota’s final paycheck requirements, separation notices, and severance agreements, as well as reporting employee termination and withdrawing registration to do business in the state.
Minnesota Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Minnesota
Minnesota state law requires that terminated employees must receive their final wages immediately, within 24 hours of a written demand. In contrast, employees who resign should be paid on the next scheduled payday—unless that payday falls within five days of separation. In that case, the payment is due by the following payday. However, it cannot be later than 20 calendar days after separation.
Salespeople on commission must be paid all earned commissions within three working days if they provide at least five days’ notice. If they give fewer than five days’ notice, they can be paid within six working days. All accrued and unused vacation time must be paid out, unless the employer has a clear policy stating otherwise.
If wages are not paid on time, employers may be liable for both the unpaid wages and up to an additional 15 days’ wages, at the employee’s highest rate of pay. Final payments must be made through the usual payment method, or by mail if the employee requests it.
2. Firing Employees in Minnesota
When firing employees in Minnesota, be aware of two notice requirements. First, Minnesota law requires any organization offering group health insurance to notify separated employees of their right to continue coverage under the state-level COBRA law. This notice must include details about the employee’s right to elect continuation coverage, the monthly payment amount required to retain the coverage, where and how to make the payments, and the deadlines for making these payments. However, employers with group health plans administered by a trust are exempt from this notice requirement.
Second, under the Minnesota WARN Act, employers are encouraged to provide advance notice to affected employees in certain circumstances. Plant closings, layoffs affecting 50 or more employees, or relocation are all covered by the WARN Act.
While notice is largely voluntary, employers are required to notify the Commissioner of Employment and Economic Development when these events also trigger federal WARN Act requirements. Employers are encouraged to notify employees, their representatives, local government, and the Commissioner as early as possible before these events. If federal WARN requirements apply, employers must provide a 60-day notice to the Commissioner, including detailed information about the affected employees. Minnesota law does not specify the content of notices to other parties.
3. Severance Agreements in Minnesota
If you plan to have your employees sign a severance agreement, it’s important to specifically list the federal and state claims they’re releasing. In Minnesota, this includes claims under the Minnesotan Human Rights Act, Minnesota’s minimum wage and overtime laws, and Minnesota’s leave laws. It’s also important to remember that under the Minnesota Human Rights Act, employees are entitled to a 15-day revocation period to rescind their release.
Make sure that your claims release only waives those that arose before the agreement’s effective date. Finally, review any applicable federal guidelines. For example, NLRB’s 2023 McLaren decision and subsequent guidance from its General Counsel restrict the use of non-disparagement and confidentiality provisions in severance agreements.
4. Reporting Employee Termination in Minnesota
When firing employees with an Income Withholding for Support Order (“IWO”), promptly report the employee’s termination to the child support agency, court, or attorney that issued the IWO. Employers may register for online reporting with the Federal Office of Child Support Enforcement here.
Alternatively, report an employee’s termination by completing the Notification of Employment Termination or Income Status section of the IWO, then fax or mail it to the child support agency that issued it. Have the following information handy:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Minnesota
If your organization has ended business operations in Minnesota, you can formally withdraw your state business registration. For-Profit Corporations and Non-Profit Corporations should file this Certificate of Withdrawal, and Limited Liability Companies (LLCs) must file this Certificate of Withdrawal. Submit the completed forms to the Minnesota Secretary of State.
Stay Compliant with Minnesota Employee Separation Requirements
Understanding your employer obligations and employee rights in a Minnesota Employee Separation Agreement can be complicated—but it’s necessary to ensure compliance.
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Looking for employee separation laws for a different state? Our interactive map makes it easy to find all employee termination requirements by state.
