Employers in North Carolina are required to pay you at least minimum wage for as long as you are working for them (and even more in some cases), but they are usually not required to pay you anything to stop working for them. When an employer pays an employee a lump sum when the employment relationship ends, it is called severance pay. In other words, the employer is severing (cutting off) the employment relationship for reasons that are not the employee’s fault, and the employer is paying the employee to respect the employer’s decision to end the relationship. Offering severance pay to employees may seem like the honorable thing to do, but there is also a sinister side to severance agreements. They say that nothing in this world is free, and this definitely applies in the case of severance pay; it often comes with strings attached. The Charlotte employment lawyers at HKM Employment Attorneys LLP can help you decide whether to accept the severance pay your employer is offering, when to negotiate for more, and when to refuse to sign a separation agreement even if it includes a apparently generous severance package.
How Much Severance Pay Can You Expect to Get?
You might place disputes over severance pay in the category of high class worries, considering that the only thing most people get when their employers terminate their employment is a lot of free time. North Carolina is an at will employment state which means that, unless you have a written contract specifying otherwise, your employer is not even required to keep you on the payroll until next week, much less pay you for time that you did not work, whether in the form of vacation pay or severance pay. Despite this, some employment contracts contain provisions that promise severance pay upon termination of the employee’s employment. There are no official guidelines about how much severance pay employers should offer, but in general, the amount of severance pay increases proportionally for the length of time that the employee has worked for the employer.
If your employment contract includes severance pay provisions, your employer is legally obligated to pay you the severance money that they promised in the contract; they cannot pay you less or withdraw the offer of severance pay unless you breached the contract by not fulfilling your job duties and therefore getting fired. If you have just been offered a job, the Charlotte employment lawyers at HKM Employment Attorneys LLP can help you negotiate for a fair severance package in your employment contract. If your contract provides for severance pay, but now your employer is refusing to give it to you, your lawyer can help you get the money to which you are entitled. If your contract did not mention severance pay, but your employer is offering it to you now that you are being laid off, that is the biggest reason of all to contact a Charlotte employment lawyer.
Severance Pay and Separation Agreements in North Carolina
When employers lay off workers because the employer can no longer afford to keep them on the payroll, they sometimes ask the workers to sign separation agreements. The best separation agreements include provisions for severance pay and the continuation of health insurance benefits. The downside to signing a separation agreement is that, when you sign, you are giving up your right to sue your employer from wrongful termination of employment. You might be thinking, “Why would I want to sue my employer?” and that is exactly what your employer wants you to think.
Is Severance Pay a Thank You Gift or Hush Money?
If you are an optimist, you probably think of severance pay as an end of service bonus, but a separation agreement that includes a severance package can be less of a going away gift and more of a Trojan horse. When you sign the agreement, you are indicating that you accept your employer’s decision to terminate your employment. Your employer’s reasons for laying you off might not be as benign as you think.
Perhaps your employer really was having financial troubles and had to lay off some employees, but why did it have to be you? Did anyone else get laid off, and had they been working for your employer for a long time? Were all the employees who got laid off of the same race or gender, different from that of the company’s major decision-makers? Were the ones who got laid off the ones who spoke up about unfair or unethical practices in the workplace? All of this is to say that maybe the “corporate restructuring” that cost you your job was not so random at all; maybe the employer asked you to promise not to sue because you have a good reason to sue and a good chance of winning a lawsuit, and maybe the severance money is just bribery, or worse, intimidation.
The tactic of asking employees to sign separation agreements works so well because hardly anyone is in a financial position where they can easily say no to a severance package equal to several months’ salary. Before you sign a separation agreement and accept a severance package, talk to your employment lawyer in detail about the circumstances under which your employment is ending. Is it part of a larger pattern of employees who share your protected characteristics being undervalued or treated as expendable? Is it retaliation for a complaint you filed or for your participation in an investigation? Is it a preemptive strike against you because your employer fears that you will file a complaint? There are some circumstances where it is not advisable to give up your right to file a lawsuit.
Contact a North Carolina Employment Lawyer About Severance Pay
An employment lawyer can help you get a severance package that is fair to you or, if appropriate, make the decision not to accept an offer of severance pay. Contact the employment lawyers at HKM Employment Attorneys LLP in Charlotte, North Carolina to set up a consultation.