Written by Ravi Sattiraju on February 7, 2018
Nobody wants to hear that they’re losing their job. Without a job, you have no income, and without income, you can’t pay the bills and buy things you need. One of the silver linings of a layoff, though, is that you will likely receive a severance package.
A severance package, however, is not a given. Companies often give them to laid-off employees to avoid future lawsuits, since offering an extra few thousand dollars or so to each employee is favored over having to face multiple lawsuits in court. However, companies are not necessarily required to give them. Read on to learn more about the rules regarding severance packages and how much you can expect to receive.
What am I Entitled to Receive?
At the very least, you are entitled to receive payment for all hours worked through your last day with the company. If you have unused paid time off, such as vacation time, you should receive compensation for that as well.
The only instance in which you are absolutely entitled to compensation is if your company has more than 100 employees, is planning a huge layoff and you don’t receive a 60-day notice. Under the Worker Adjustment and Training Notification (WARN) Act, you must be given at least 60 days notice of the impending layoffs. If you are not given any notice, and are laid off, then by law, you are entitled to back pay and benefits.
If you are fired from your job, you may receive severance pay as well, but it’s not mandatory. Many employers do it as a gesture of goodwill to prevent hard feelings as well as costly lawsuits.
How is Severance Pay Calculated?
Each company has its own method of calculating severance pay for employees. However, the standard often involves using years of service. This means that the longer you have been with a company, the higher the amount of severance pay you can expect to receive. Many companies offer a week or two of pay for every year you were employed at the company. You may also receive extended health insurance and other benefits for a few months.
In order to receive to receive a severance package, however, you may be asked to sign a form agreeing not to sue the company for your job loss. Once you sign this form, you give up your legal rights. Therefore, if you feel you were terminated unfairly, you may want to consider filing a lawsuit instead.
Work with an Experienced New Jersey Employment Law Attorney
Many companies offer severance packages to laid-off employees as a gesture of goodwill. Even those who have been fired may receive some compensation so that the employees don’t file a lawsuit.
If you feel you have been wrongfully terminated and do not receive any compensation, you may have a valid claim against your employer. The New Jersey severance attorneys at The Sattiraju Law Firm, PC can assess your situation and inform you of your legal options. Call (609) 722-7026 to schedule your free case review.