Legal Mags – Question about Severance Pay

So my employer is closing the doors on my place of employment come 8/31 and they are offering us a Severance Package. The package includes 2 weeks pay for every year we’ve worked here (7). The kicker is that many of us are paid a base salary as well as a commission. The base salary is pretty small and the commission is almost the same amount. As you guessed it, the employment likes to stick it in the arss to its employees at any chance possible so the Severance package is based off our salary and does not include any of the commission compensation.

I know ethics don’t mean much in these situations but are there any legal aspects I should know about?

Thanks in advance.

Yeah, it's illegal for you to burn the place down.

You don't have a legal right to any severance. They are giving you severance pay in return for you forever waiving any claims against the company and its principals. Aside from just pointing out the unfairness of failing to take commissions into account in calculating the severance package, your only leverage is to hold out and give them the impression you will seek more $$ by taking some kind of legal action.

So now would be a good time to start acting homosexual, if you're in California, or African-American, if you're in Colorado (I can't remember.) It will be fun!

The employer isn't obligated to provide you anything other than the notice and actually provided more notice than is necessary for a plant closing (I think the minimum notice is 60 days). You might have an argument that you're being treated unfairly IF they are only paying your severance based on your base salary as your total compensation is a split where others in the company are full salary and are receiving severance accordingly. Other than that, I would say that you should thank them for what you're getting and make sure you don't burn bridges.

Are you in NV or CA? CA is an at will employment state - they can fire you at any time, no severance necessary.

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Originally Posted by cj001f

Are you in NV or CA? CA is an at will employment state - they can fire you at any time, no severance necessary.

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There's no severance necessary anywhere unless it's a contractual issue. If NV isn't an at-will state, then all that's necessary is proof of cause for termination. Plant closings qualify and no severance is required.

Thanks for the info guys. I’m in Cali.

I am thankful for the package (and its nice to know that they don’t have to pay it but they are), it just sucks that they bend us over at any possible chance.

Another example is that most of the employees were also offered a “staying bonus” to stay until 8/31 on top of their severance package. Our specific division was not.

The salt on the wound is that the folks that are getting it are in 99% of the cases less tenured than us and are considered to be lower on the ladder. They also have a higher base pay because they don’t get commission.

Sucks.

Thanks again.

Yeah, it's tough. But, I'm guessing you're in sales and, since they're closing, your department isn't likely one that they necessarily have much use for. The other departments still have to produce the obligated work that you've sold. I can see where they're coming from so far as the staying bonus goes. Anyway, don't burn any bridges and be sure to thank them on the way out the door. It's really funny/strange how things that go 'round come 'round again.....

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Originally Posted by GoldMember

It's really funny/strange how things that go 'round come 'round again.....

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so true.

thanks GoldMember!

No worries. Good luck in your job search.

So, you are in S.Lake right? You gonna be looking down there.....or elsewhere?

If you start thinking Reno at all....let me know.

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Originally Posted by Huckwheat

So, you are in S.Lake right? You gonna be looking down there.....or elsewhere?

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I'm in teh foothills, 60miles from SLT. My goal is to move the family to the mtns someday but for now I'm here. I'll be looking in the foothills or Sac. Thanks for the offer! :)

:Looks for the Truckee shop looking for sales/wrench help thread:

BC - Sorry to here about this. I know the California labor code pretty well as it is part of my job. Yes you are getting the shaft and no there is nothing you can do about it. As people stated CA is at-will and that means F off. Companies are not required to to pay severance ever so anything they give count your blessings. Under CA Sate Law (more broad than Fed Law) a mass layoff would constitute a layoff for a period of 30 or more days 50 or more full-time employees would require notice..which the company has done. They will require you to to sign releases etc etc and if they don't they are being dumb.

Also if you have accrued vacation or PTO it will be paid out at the salary level and commissions will not be included. (if they are not wise or want to be generous they may include the commissions but it does not sound like it) Under California Law there is no set way for employers who offer vacation benefits to commissioned employees to compute the dollar value of accrued vacation. Unless there is a salary at time of termination the accrued benefits would be paid at usually the state min wage $6.75 an hour. Be thankful you had some type of salary.

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Originally Posted by Nugget

Yeah, it's illegal for you to burn the place down.

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Yeah, but someone stole my stapler.

Your state is most likely an "at will" state which means they can let you go without cause. They re not required to pay you any severence it's a "kind" jesture. Start interviewing now have something lined up and bank the severence for ski season.

Good Luck,
Jay