Severance trick

I understand a severance package may be non negotiable. Is it necessary to outline this term in the language of the package? Is it proper to offer wages owed to me as a part of a package? It is an amount which is considered bonus/commissions and generally paid at the end of a month.

Thank you

1 answer  |  asked Apr 7, 2008 12:24 PM [EST]  |  applies to New York

Answers (1)

David M. Lira
Severance Pay Generally

Generally, in New York State, you have no right to severance pay. If an employer has a regular practice of paying severance, that may fall into an exception under federal law to the general rule. Some employers have formal written policies concerning severance. Severance with these employers may also fall under the exception under federal law.

The term "severance" is intended to cover a type of renumeration beyond weekly earned wages or earned leave. If an employer includes unpaid wages or unused leave in a severance package, that probably isn't a problem. However, an employee would be entitled to unpaid wages and earned but unused leave even though the employee is not entitled to severance pay.

Similarly, an employee would be entitled to unpaid commissions or bonuses, provided that they are also considered earned. Whether they are earned depends on the employer's practices and policies. With respect to commissions, there is a law saying when commissions are earned, if there is no employer policy. Frankly, the law favors the employer.

Generally speaking, vacation leave is considered earned, and sick leave is not. However, whether you are entitled to payment of vacation or sick leave on your leaving an employer depends on the employer's practices and policeis.

posted by David M. Lira  |  Apr 8, 2008 08:50 AM [EST]

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