Job rights don't disappear when you leave the building
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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.
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.
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."
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 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
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
"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.
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.