Minnesota Statutes

Minn. Stat. § 465.72 (2026)

Severance Pay

✓ current as of May 2026
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Subdivision 1.Payment; limits.

Except as may otherwise be provided in Laws 1959, chapter 690, as amended, a county, city, township, school district or other governmental subdivision may pay severance pay to its employees and adopt rules for the payment of severance pay to an employee who leaves employment. Severance pay does not include compensation for accumulated sick leave or other payments in the form of periodic contributions by an employer toward premiums for group insurance policies for a former employee. The severance pay must be excluded from retirement deductions and from any calculations in retirement benefits. Severance pay must be paid in a manner mutually agreeable to the employee and employer 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, that balance due must be paid to a named beneficiary or, lacking one, to the deceased's estate. Severance pay provided for an employee leaving employment may not exceed an amount equivalent to one year of pay.

Subd. 2.

MS 1986 [Repealed, 1988 c 605 s 14]

Notes of Decisions
Cited in 6 cases, 1984–1997 · leading case: State Ex Rel. Beaulieu v. Indep. Sch. Dist. No. 624, 533 N.W.2d 393 (Minn. 1995).
State Ex Rel. Beaulieu v. Indep. Sch. Dist. No. 624, 533 N.W.2d 393 (Minn. 1995). · cites it 16× “2d 572 , the majority reversed the ALJ, holding that ISD’s voluntary “early retirement incentive” provisions, which distinguished between former employees based on age, was authorized by Minn.Stat. § 465.72 (1986). As a result, the court concluded that the scheme spelled out by…”
State Ex Rel. Beaulieu v. Indep. Sch. Dist. No. 624, 509 N.W.2d 572 (Minn. Ct. App. 1994). · cites it 80× “Minn.Stat. § 465.72, subd. 1 (1986) must also be considered.”
Paske v. Cnty. of Dakota, 356 N.W.2d 775 (Minn. Ct. App. 1984). · cites it 2× “In 1979, Minn.Stat. § 465.72 (1978) provided: [A]ll counties, cities, townships and school districts are hereby authorized and empowered to pay severance pay to all of its employees and to establish, prescribe and promulgate provisions, rules and regulations for the payment of…”
Rosinski v. Teachers Ret. Ass'n Bd. of Trs., 495 N.W.2d 14 (Minn. Ct. App. 1993). · cites it 4× “Minn.Stat. § 465.72, subd. 1 (1990). Severance payments for teachers include (1) payments to an employee to terminate employment; (2) payments, or that portion of payments, that are not clearly for the performance of services by the employee to the employer.”
Op. Atty. Gen. 161b-12 (Minn. Att'y Gen. 1997). · cites it 4× “Wedl, Commissioner Page 8 Minn. Stat. § 465.72 authorizes payment of severance pay to employees of school districts and imposes limitations thereon For example, severance payments generally may not exceed the equivalent of one year’s pay and must be paid over a period not to…”
Rosinski v. Teachers Ret. Ass'n, 495 N.W.2d 14 (Minn. Ct. App. 1993). · cites it 4× “Minn.Stat. § 465.72, subd. 1 (1990). Severance payments for teachers include (1) payments to an employee to terminate employment; (2) payments, or that portion of payments, that are not clearly for the performance of services by the employee to the employer.”
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