Sjoberg & Tebelius, P.A.
Serving Minnesota & Western Wisconsin

Changing the Benefits Offered to a Predecessor's Employees

boat.jpgQuestion: I've just purchased a business. My predecessor was very generous with the employees when it came to PTO. Do I have to follow suit?

Unless you have entered into a contract that would require you to do so, the short answer is: No.

Paid sick time and paid vacation time are not governed by Minnesota Statutes, but rather they are a benefit granted by an employer to an employee at the employer's discretion.[1] With a transfer of business, employees should naturally expect some changes in management policies and practices. If you want to give two weeks' paid vacation rather than the four weeks your predecessor offered, that's your prerogative.

What you should consider, however, are industry standards and the importance of employee retention. Rocking the boat too much could cause a mass exodus that could leave your new enterprise floundering.

Something that might help with the adjustment: if your predecessor gave more PTO than you'd like to give, but he/she did not pay out unused leave as wages upon termination, you could offer that new benefit to help pacify any unrest.

Note 1: Keep in mind that there are some paid and unpaid leaves that are provided by Minnesota Statutes, (e.g., voting (§ 204C.04); bone marrow donation (§ 181.945); organ donation (§ 181.9456); parenting leave for certain employees (§ 181.941); school conferences (§ 181.9412); and jury duty (§ 593.50)).

I hope you found this information useful.

Next question coming up: My employees are talking about the business on Facebook. Help! What do I do?

Disclaimer. This article is for informational purposes only and does not constitute legal advice. Neither does it create a lawyer-client relationship. You should not rely upon this information without seeking your own professional counsel.

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