Severance Laws All New Employers Need to Know

Severance Laws All New Employers Need to Know
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    In most instances, employers are not required by severance pay laws to offer parting packages to terminated staff, but in some cases, it makes sense to go ahead and do so.


There are employers that think severance packages in the form of benefits and money is required by law, but in most situations, this assumption is false because applicable severance pay legislation does not require packages be provided. Below, there are some facts about severance pay laws for employers.

When Employers Are Required to Pay Severance Pay

There are two situations when an employer must offer a severance package by law, and there is one scenario where it is offered. The first is dependent on state regulations. The second has to do with employment contracts. The third situation is volunteered for a number of reasons, usually loyalty, and it is not required by law. Bachus & Schanker who specialize in personal injury say the best bet is asking your own state what they require in these instances.

Special Circumstances Under State Laws

Several states have employment laws requiring companies to give severance pay to terminated employees. The requirement’s condition surrounds an entire facility closing or a massive layoff. Depending on the state’s laws, employers may need to offer a small severance package. Here is a resource where you can find out about your state’s severance laws from the state labor department

Contractual Obligations

Employers may have to provide terminated employees packages because it was stipulated in a contract prior to employment to do so, or if an employer led an employee to believe a severance package would be provided. For example, an oral contract between two parties, a history of giving out severance packages, mention of a severance package in the employee handbook and other factors. Your own lawyers may also be able to squeeze a severance package out for a long-term employee hurt on the job. Getting legal advice from an employment lawyer in your area is also advised.

It is important to pay attention to the hiring practices of your new job and be aware of past severance options. To recap, there is some protection from the law in some states, but each state has a variety of criteria. The only way to be guaranteed a package is if it is spelled out in the contract, and the termination did not void any terms of the agreement. Companies still reward loyalty, which is encouraging. It may not be a guarantee, but it is nice to know it still happens.



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