I am working for a company that is incorporated in Minnesota, but has offices throughout the US and Canada. One of our Canadian employees recently left the company, and is questioning what we owe him for vacation pay. Canadian law states that he is owed 4% of his annual salary times the portion of his vacation that has accrued for the current year. The US law that I have found states that it is dependent on the agreement between the employer and the employee. In all of our employee contracts, it is agreed that vacation pay carries no value, and vacation time does not carry over from one year to the next. My question is, does Canadian labor law or US labor law take precedence here?

Was the employee working in the US or in Canada?

Did this employee sign an individual employment contract?

This employee was employed in Canada, but he did sign an individual contract stating that vacation has no value.

Since he worked in Canada, it is overwhelmingly likely that Canadian law applies.

Unless the contract specifically states that the laws of Minnesota shall apply, wherein you, as the employer, would have a very strong argument that regardless of where the employee performed services the laws Canada are not applicable and MN law governs.

I would be very surprised if this contract did not contain such a provision.

Thank you for your help.