Are contractors entitled to severance?

We recently released an independent contractor from our business, who was working without a formal contract. Due to the sensitive nature of the work they were performing, we were unable to give notice and had to release them immediately. As a good faith gesture, we offered to pay out an amount equal to the average of the past 3 invoices for services, as well as pay for hours to date. The contractor is now asking for much more. Are we obligated in any way?

1 answer  |  asked Feb 7, 2012 8:56 PM [EST]  |  applies to Washington

Answers (1)

Terry Venneberg
Severance payments are arranged by contract between the parties, and there is almost never an obligation to provide to severance to either an employee or independent contractor. Severance payments are usually accompanied by some sort of release of potential claims by the person receiving severance, and that is usually the primary motivation for employers to offer severance at the end of employment. You should certainly consult any written agreements that you have with this contractor concerning any obligation that you might have in this instance.

posted by Terry Venneberg  |  Feb 8, 2012 11:15 AM [EST]

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