What remedies should I consider re my former employer not paying contracted severance pay?

Our employer offered an early retirement incentive plan, which included severance pay offered on a sliding scale, based on years of employment. Agreements were signed, and the exit interview form specified the severance pay date of check as 1/21/11. Those who accepted this offer and signed the agreement have not been paid as of today. As an alternative, those accepting the plan were allowed to leave their severance with the company to pay for health insurance, unless at some point later in the year they found individual health coverage. At that point we were told that the balance of the severance would be paid out to us. I fall into this category, and have been informed by the business manager that he was going to "try to make this happen" by the agreed-upon date (per a previous email from him.)

2 answers  |  asked Mar 10, 2011 1:01 PM [EST]  |  applies to Pennsylvania

Answers (2)

Christopher Ezold
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 or Federal law apply, unless otherwise specified.

That being said, I would only add to Ms. Dabrowski's answer that pursuant to Pennsylvania's Wage Payment and Collection Law ("WPCL") the failure to pay wages can subject the employer (both the company and the individual(s) who are responsible for wage payment decisions) to a 25% penalty and require them to pay your attorneys' fees if you have to sue. Severance pay and benefits are both considered wages under the WPCL.

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/
The Ezold Law Firm, P.C.
One Belmont Avenue,
Suite 501
Bala Cynwyd, PA 19004
(610) 660-5585

posted by Christopher Ezold  |  Mar 10, 2011 2:22 PM [EST]  [ Best Answer - selected by asker ]
Doris Dabrowski
As a general rule, a court may enforce a contract by placing the parties in a position they would enjoy in the absence of a breach of contract. In some cases, a court may order the breaching party to perform; damages may be appropriate to compensate for losses due to the breach. If the employer maintained a severance plan that is an ERISA plan governed by federal benefits law, equitable relief designed to make the parties whole is available. Damages are not available for violations of ERISA plans. A complete answer and advice requires review of the severance agreement, the severance policy or plan, and the detailed facts about the breach.

posted by Doris Dabrowski  |  Mar 10, 2011 1:31 PM [EST]

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