HF 399

as introduced - 90th Legislature (2017 - 2018) Posted on 02/02/2017 03:37pm

A bill for an act
relating to public employment; clarifying limits on severance pay to highly
compensated public employees; amending Minnesota Statutes 2016, section 43A.17,
subdivision 11.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 43A.17, subdivision 11, is amended to read:

Subd. 11.

Severance pay for certain employees.

(a) For purposes of this subdivision,
"highly compensated employee" means an employee of the state whose estimated annual
compensation is greater than 60 percent of the governor's annual salary, and who is not
covered by a collective bargaining agreement negotiated under chapter 179A.

(b) Severance pay for a highly compensated employee includes benefits or compensation
with a quantifiable monetary value, that are provided for an employee upon termination of
employment and are not part of the employee's annual wages and benefits and are not
specifically excluded by this subdivision. Severance pay does not include payments for
accumulated vacation, accumulated sick leave, and accumulated sick leave liquidated to
cover the cost of group term insurance. Severance pay for a highly compensated employee
does not include payments of periodic contributions by an employer toward premiums for
group insurance policies. The severance pay for a highly compensated employee must be
excluded from retirement deductions and from any calculations of retirement benefits.
Severance pay for a highly compensated employee must be paid in a manner mutually
agreeable to the employee and the employee's appointing authority over a period not to
exceed five years from retirement or termination of employment. If a retired or terminated
employee dies before all or a portion of the severance pay has been disbursed, the balance
due must be paid to a named beneficiary or, lacking one, to the deceased's estate. Except
as provided in paragraph (c), severance pay provided for a highly compensated employee
leaving employment may not exceed an amount equivalent to six months of pay the lesser
of:

(1) six months pay; or

(2) the highly compensated employee's regular rate of pay multiplied by 35 percent of
the highly compensated employee's accumulated but unused sick leave hours.

(c) Severance pay for a highly compensated employee may exceed an amount equivalent
to six months of pay the limit prescribed in paragraph (b) if the severance pay is part of an
early retirement incentive offer approved by the state and the same early retirement incentive
offer is also made available to all other employees of the appointing authority who meet
generally defined criteria relative to age or length of service.

(d) An appointing authority may make severance payments to a highly compensated
employee, up to the limits prescribed in this subdivision, only if doing so is authorized by
a compensation plan under section 43A.18 that governs the employee.

EFFECTIVE DATE.

This section is effective the day following final enactment.