Severance pay helps bridge the gap between when one job ends and a person obtains new employment. Many high-performing professionals negotiate severance packages during the onboarding process as part of a comprehensive pay and benefit package.
Occasionally, professionals negotiate for severance pay when they learn they are about to lose their jobs. Businesses may agree to offer severance to lessen the impact of a layoff or sudden termination. Other times, employers may refuse to honor a severance agreement.
Professionals may assume that they have the protection of temporary income and benefits until they find new work. That’s especially true when an initial employment contract includes a severance agreement. When can employers legally refuse to provide employees with contractual severance packages?
When they terminate employees for cause
Most severance agreements include provisions that protect employers when they terminate workers for misconduct, performance issues or attendance problems. A termination for cause is often reason for an employer to refuse to honor a severance agreement.
It is also important for employees to understand that neither federal or California state law establishes a legal obligation to provide severance pay in the absence of an agreement. They often need help negotiating for severance when they accept new positions or after learning about a pending termination. They may also need help holding their employers accountable for failing to honor a severance agreement.
Professionals facing a denial of contractual severance or an employer’s attempt to reduce their severance may need assistance negotiating with their employers. Severance agreements protect employees, but enforcing them sometimes requires the guidance of a legal professional.