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(Trends Wide Business) — The abrupt and rude way in which thousands of Twitter employees were laid off last week was quite a spectacle.
But it was also a helpful reminder that while employers can dump many workers at will (and with zero grace), employees are not without rights when they are laid off en masse.
Here is a brief summary of what employees should know.
How far in advance should I be notified of a dismissal?
In the event of a plant closure or mass layoff, you must give at least 60 days advance notice, in accordance with the federal Worker Adjustment and Retraining Notification (WARN) Act. Some states may require more days in advance: New York, for example, requires 90 days. And states can also set standards that are stricter than federal law, such as requiring employers with fewer workers to comply with the WARN Act.
If an employer is found to have violated the WARN Act, in addition to paying fines to the State, they will have to pay up to 60 days (or more, depending on State requirement) of back wages and benefits to those laid off, depending on how many days of notice the company has actually given.
In this case, “notice” means giving notice to the community at large, but also to each person who is going to be laid off, said labor attorney Michael DuPont, who is a managing shareholder of the Washington-based law firm Wagner, Falconer & Judd. Minnesota, and which also provides legal services through LegalShield.
If a company abruptly terminates you, it can be considered to have complied with the WARN Act as long as the effective date of your termination is at least 60 days from the day you were notified of the termination, said employment attorney Alex Granovsky, co-founder of the New York-based law firm Granovsky & Sundaresh.
Technically, you’ll still be on the company payroll and continue to receive pay and benefits in the interim, and then any severance you’re awarded would kick in.
What amount of compensation am I entitled to?
Fun little fact: No law, federal or state, requires employers to offer you severance pay when you’re fired, unless you have a union or individual employment contract that provides for it.
That said, many employers offer some type of severance package to protect themselves from any potential legal claims you may have as a result of your employment or termination.
A second reason many offer severance pay: “Goodwill and fairness to employees and the community at large. Offering additional compensation in recognition of the potentially hard time the employee and the community [experimentarán]DuPont said.
What am I giving up in exchange for accepting compensation?
Your employer will want you to give up certain rights in exchange for money.
Simply put, “the company covers itself for all the ways a former employee can harm it,” Granovsky said.
Generally, you will waive your right to make a claim against the company, for example, for discrimination, hostile work environment, non-payment of wages, or any other alleged violation.
It’s also common to have to agree to various clauses that prohibit you from harming the company, he said. Among them are:
Confidentiality clause: This clause prohibits you from sharing details of the company’s business or even the terms of your severance agreement.
Non-discredit clause: Forbids you to speak ill of the place.
Cooperation clause: you agree to help the company in the event that it is sued in the future for an issue about which you learn as a result of your tenure with it.
Non-cooperation clause: Prohibits you from helping anyone else who tries to sue the company.
Non-solicitation clause: means that you cannot steal from your former employer’s clients or employees in case you start working elsewhere or launch your own business.
However, the waiver of these types of rights does not exempt the employer from having to pay you what they already owe you, such as a pension or earned vacation or sick leave. “The consideration offered for the waiver of the right to sue (…) must be something of additional value to any of the employee’s existing rights,” says the US Equal Employment Opportunity Commission (EEOC, for its acronym in English).
Can I negotiate the conditions of compensation?
If you believe you have legitimate claims against the company, your employer will almost certainly prefer that you not sue them, so they will likely be more open to negotiating the terms of your severance pay.
“A company would rather pay $100 now to avoid paying $150 later,” says DuPont.
If you don’t have a strong case to justify filing a lawsuit, which you could use as a bargaining chip, you can try to argue why your employer might sweeten your award.
“Asking is fine. You have to ask. There’s nothing wrong with asking,” says Granovsky.
You can ask for more months of paid health benefits if you or a family member on your insurance plan is battling cancer, DuPont pointed to as an example. Or, if you’re a long-time employee with a good reputation or have a special skill set that the employer might want to take advantage of in the future, you could make a compelling case for why the company should offer you some extra pay.
Should I Hire an Attorney?
Since the severance agreement is an important legal document that will affect your immediate future, it may be helpful to have an employment lawyer experienced in severance cases review the company’s offer.
If hiring a lawyer directly is too expensive, you might consider a less expensive service like LegalShield, which only charges about $30 a month for access to an employment lawyer in your state who can review your offer, make sure it meets the law and make a call on your behalf to your employer if you seek to make modifications to the agreement.
If your case is complicated and involves more legal action, or if your severance agreement is longer than 15 pages, the costs will be higher, but you will get a discount on your attorney’s hourly fees.
Or, if you just have a few very simple questions, some employment lawyers may offer a free consultation over the phone.
How much time do I have to decide if I accept severance pay?
Under federal law, if you’re 40 or older, you must be given at least 45 days in a collective layoff (21 days if your layoff is not part of a mass layoff) to decide whether to sign your severance agreement.
In either case, if you accept the offer, you must also have 7 days to change your mind.
That said, each state may have its own requirements above the federal minimum requirements, DuPont said. So check your state’s Department of Labor website to see what their specific requirements are.
Will I lose my compensation if I have income again?
Many employers can suspend severance pay if the company rehires you for a new position.
If you find a job elsewhere or start out on your own, some companies may choose to reduce your compensation if your new source of income is less than what you had before.
“They can say, ‘If you make less money, we’ll just pay you the difference,'” Granovsky explains.
In either case, the termination agreement should explicitly state what the employer’s policy is. So do not sign it until you are clear about those conditions.
But if the settlement doesn’t say anything about it, chances are you’ll continue to receive the full award while earning income from another source. “So the employee wins,” says DuPont.
