Severance And Final Wage Payment Dute Date

I have s Separation and Release Agreement from a New Jersey corporation which has following paragraphs:

1. Termination Date. Employee acknowledges that his employment with the Company will terminate August 1st, 2008 ("Termination Date"). The Company agrees that it will pay Employee his regular pay and any accrued but unused vacation through the Termination Date, less applicable tax withholding deductions and prior vacation advances if any.

3. Terms of Separation. Provided the Employee executes and does not revoke this agreement, returns all equipment, materials and reains until termination date and records of the Company which are in his possession, custody or control, assists in the transition of his responsibilities and abides by the provisions of this Agreement, the Company will continue to pay the employee for four (4) weeks his base salary as severance, at the rate in effect immediately prior to the Termination Date, less applicable tax withholdings, on or before August 1st, 2008.

That being said, it is my contention that on or before August 1st, 2008 my employer owes my the amount of my severance, in full.

Am I correct? If so, how would I properly advise my employer of this requirement as a matter of law by virtue of the aforementioned language.

Also, the pay date for the pay cycle ending on August 1st is August 8th. Does my employer by virtue of the severance agreement have to pay me my final wages, including those for accrued but unused vacation on or before August 1st, 2008 or are they allowed to wait until the next pay date?

Thank you for your learned expertise.

2 answers  |  asked Jul 18, 2008 1:16 PM [EST]  |  applies to Pennsylvania

Answers (2)

Harold Goldner
Reasonable minds can differ

I do not interpret the 2 clauses the same way as Mr. Ezold, a colleague of mine for whom I have great respect, but as he says, we cannot really assess your situation without the *entire* contract before us.

I interpret those clauses to suggest that severance will be paid out over a four week period based upon your rate PRIOR to August 1, 2008, the termination date.

BTW, you might prefer that. Lump sum payments tend to suffer 'bracket creep,' that is, overwithholding of taxes, such that your next is actually less than it would be paid out over time.

There are laws concerning payment of wages, etc. which I would be happy to review with you if you are interested in setting up a formal consultation.

And to reiterate what Mr. Ezold says, dialogue on this website does not constitute an attorney-client relationship, nor is it an adequate substitute for your seeking a lawyer.

posted by Harold Goldner  |  Jul 18, 2008 4:12 PM [EST]
Christopher Ezold
It appears your employer can pay severance on regularly scheduled paydays.

Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, New Jersey or Federal law apply, unless otherwise specified.

That being said, it appears your employer can pay severance on regularly scheduled paydays. While the agreement is not a model of clarity, it seems to indicate that you will be paid your regular pay through your termination; the law requires that such pay be made by the date it would regularly be paid (August 8th, for you). Furthermore, the payment of severance seems to be based on payment at a rate that existed on the day you were terminated, but which will be paid on regular paydays.

I'd be happy to review your entire document with you, and discuss your rights. If you would like to discuss this matter further, please feel free to contact me at the below address(es) or number.

/Christopher E. Ezold/
Nancy O'Mara Ezold, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Jul 18, 2008 1:29 PM [EST]

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