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Job rights don't disappear when you leave the building -- Page 2

One other thing to keep in mind: Unemployment benefits are considered taxable income by the Internal Revenue Service. So you might need to set aside some money to pay taxes on any payments you receive.

Final paycheck
Many states now have laws specifying when you should receive your final paycheck. It may be tied to a number of hours from your date of termination (72 hours is common in seasonal industries), the company's next pay cycle or whether you quit, were laid off or fired. Check with your state's department of labor for more information.

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Vacation and sick leave
Your right to be paid for unused vacation or sick leave time may vary by state.

"Most states require that employers pay whatever you have accrued. Once something is accrued, it belongs to you and it has to be paid," says Delpo. "If you have accrued vacation or sick leave and it doesn't get paid out, you should contact the department of labor in your state."

Comp time
Compensation time is typically awarded by management to salaried employees who are exempt (not eligible) for overtime pay. Willoughby says collecting comp time can be problematic depending upon the terms under which it was offered.

"If you do the work because you are required to do it and the employer says he's going to give you a gift and then reneges on it, generally that is not a contract. A promise to make a gift is not enforceable," he says. "But if, on Jan. 1, the employer says, 'If you bust your butt this month and we finish the project, I'll give you three days of comp time,' well now you have a deal."

There is no federal statute on the subject, but many states have adopted wage payment and collection laws that can help you collect comp time you feel is due you.

Unless you have a contract that provides for it, there is no law that requires an employer to pay you severance pay. That said, company policy (as stated in an employee handbook, for instance) or long-standing precedence could provide you with a valid legal claim to a parting gift.

"If the employer has given severance as a practice in the past and singled you out not to get it, you might have a legal claim that is probably worth taking to a lawyer," says Delpo.

Delpo says some companies may offer one- to two-months salary to laid off workers, while more generous employers might offer long-term employees perhaps one month's pay for every year worked for the company. But you may have to sign a severance waiver to collect.

Herring says severance pay is increasingly common in today's more mobile workplace for several reasons:

  • In cyclical industries, the employee you lay off today remains a trained and valuable asset that you may well want to rehire tomorrow.
  • The increased competition for skilled labor has made many companies more aware than ever of their public image.
  • Then there's the "survivor syndrome." Employers want to keep morale high among those who didn't get a pink slip.

"Companies really are wanting to maintain a positive relationship with their outgoing employees, for rehiring, for public image and for the remaining employees who want to feel like they are taken care of," she says.

Severance agreement
Increasingly common today is the severance agreement (also separation agreement or severance waiver), in which you relinquish all rights to sue your former employer. Companies often offer a severance check as an incentive to sign the waiver; no signature, no parting gift.

"Overall, the severance contract movement is a good thing for most employees," says Willoughby. "Those who have been truly treated illegally by their employer, who have strong legal rights, they are not going to be signing their severance contracts anyway, not after they go see a lawyer."

Be forewarned: Once you sign, there's no going back.

"You have the right to give up your rights in exchange for money," says Willoughby. "That's freedom of contract and the courts are not friendly to attempts to try to break severance agreements."

If you have the high-demand skills to negotiate a severance package before you're hired, you might want to improve your position on a few of these items. For instance, while COBRA doesn't require your employer to pay for your continuing health insurance, you may wish to require that in your severance package.

"It's a very wise thing to think about negotiating the terms of your ultimate departure," says Willoughby. "It's good to think about how the relationship will end upfront, because they always end."

Jay MacDonald is a contributing editor based in Mississippi.

-- Posted: March 18, 2005




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