Do You Have A Legal Right To Severance Pay?

Your company is going to let you go. They’ve been up front about it, so you know it’s coming. They’ve given you a two-week warning. What you really want, though, is severance pay. You know it’s going to take time to find a new job and you need money to keep paying the bills during your job search.

You feel like you’re entitled to severance pay. After all, you’ve been with the company for over a decade. Do you have a legal right to be paid on your way out?

You probably don’t. The Department of Labor specifically notes that the Fair Labor Standards Act (FLSA) does not guarantee this pay and does not require employers to hand it out. Legally speaking, they can terminate your position without giving you a dime.

That said, the DOL does note that severance pay is based on the agreement between an employee and an employer. For instance, perhaps you signed a contract when you took the job that said you would be given a year’s salary if you were laid off. If the company is now refusing to pay out and honor that contract, then you may have a legal case because of the violation of the contract that both parties signed.

So, while the law doesn’t guarantee payment to every employee, it can protect you when your rights are being violated. When a contract is breached, it’s imperative that you understand what legal options you have, what rights and benefits you were granted, and what next steps you should take to ensure that your employer adheres to that contract.

Source: Department of Labor, “Severance Pay,” accessed Aug. 04, 2017