Did I miss payday?

March 10, 2009 11:34 AM

HR is claiming I need to waive a week of severance pay. How do I proceed?

I was laid off late last week, and given a severance package. I didn't sign the severance agreement until today (haven't sent it yet), and now HR is claiming I need to waive a week of severance pay. I called HR today for an unrelated issue, and they mentioned that they'd like to remind me to send back my signed severance agreement, along with a note that I would waive seven days of pay since they did not have my agreement in hand and therefore could not put me on payroll.


This was not at all clear to me at the time I was laid off, though in re-examining the severance agreement I guess their claim could stand up, though it's not mentioned explicitly that I would not get paid if I didn't send the severance agreement back immediately. Nowhere does it say I'll lose any of the pay they offered, unless I didn't sign within a time that's later than now.


So, should I send a letter waiving my claim to 7 days' pay with my separation agreement? If not, what is the best way to go about disputing their claim? Like most people, I really can't afford to lose seven days of pay right now. I worked in NYC for a company based in CA, if that is relevant.

posted by anonymous to work & money (10 answers total)

IANAL, but that sounds like bullshit to me. I wouldn't sign it. It's fine they don't want to pay that one week where you failed to return their agreement, but they should just extend you into the next week instead of saying "tough luck."
posted by MegoSteve at 11:44 AM on March 10, 2009

Don't sign anything. The state you worked in is the one whose laws are relevant, doesn't matter where the company is based.

I'm sure NY has an "employment commission" or some body that regulates these things- try calling them.

Although, as far as I know, no severance pay at all is required by law, except pay for unused vacation days and such. So them taking it away may be a total dick move, but not illegal. But I am just guessing, so definitely ask an expert.
posted by drjimmy11 at 11:51 AM on March 10, 2009

Don't sign anything.
posted by boomcha76 at 11:53 AM on March 10, 2009

I'm guessing that somewhere, buried on the website or in your benefits orientation materials, this clause exists -- definitely check. It's unfortunate, but it is your responsibility to know what the process is, including your deliverables, once they provide you with the information. If it's no where to be found, you might have a case.
posted by thinkpiece at 11:53 AM on March 10, 2009

IAANAL, but people who were recently ahem downsized at my company had 45 days to sign the waiver and 60 days to sign up for COBRA.
posted by Gungho at 11:58 AM on March 10, 2009

"re-examining the severance agreement I guess their claim could stand up"

Can you post back to tell us what the clause says?

This is my understanding: A company cannot threaten your last pay, COBRA, etc. But, severance agreements are different. They are a contract between you and them. You agree to certain things (for example, that you won't share trade secrets or sue them for unlawfully letting you go) and they will give you money. They write up the agreement, and can basically write what they want. Then you must decide if you agree. If you do, you sign and get the money.

So following that logic (that it's a contract they write), if it says so in the contract, then yes you missed payday.

If it were me, I'd go talk to your former HR representative, and tell them that you'd made a mistake and would like to get the full amount, and that you are prepared to sign the agreement right now. My thought is that if you talk to a person face-to-face, you may get them to waive the waiver, based on either sympathy or a desire to get you to sign the agreement (to not sue, disclose, or whatever is included). Remember that it's a 2-way street: You agree, they pay. So, they have interest in getting you to sign the paper, just as you have interest in getting the money.
posted by Houstonian at 12:46 PM on March 10, 2009 [1 favorite]

I'd sign the agreement and send it in but without waiving any pay. If they pay you in full, great. If they withhold pay, then you can consider your options.
posted by indyz at 1:17 PM on March 10, 2009

IANAL, but they cannot threaten you to sign on the spot. Any judge would throw that out immediately. Laws may be different depending on your state and depending on your age (workers over 40 have certain protections).

Call a lawyer. Do not try to negotiate this on your own.
posted by micawber at 2:26 PM on March 10, 2009

Unless it was spelled out in a written employment contract they aren't obligated to provide you with any severance. So realize that your negotiating position may not be all that strong.

* Severance is a contractual agreement, and if contract law didn't require that both sides get something out of an agreement they'd be trying to get you to sign a waiver without giving you anything. They're offering you this money because they want some sort of releases or assurance against your suing them, or making certain claims later.

Which does bring up a point: you HAVE read the rest of this and know what you're agreeing to, right? NOT just the issue of whether they can pinch you for a week of it?

Getting to the point: you need to decide if this week's worth of money is worth risking the rest of it for. Push comes to shove, they can likely tell you to piss off and give you nothing.

Personally I'd sign it and put it in the mail as-is. Play stupid and pretend you'd already mailed it. Hope that someone else will get it and just process it. If they have a firm policy on how quickly it has to be received then you're probably out of luck. They'll either go ahead and shave off that money (odds are they don't necessarily need a piece of paper from you with that explicit allowance if it's doable within the letter of the agreement) or they'll contact you and demand it before they'll process it.

Or, if you can't afford any delay in getting this money, do what they ask and send it along with the agreement. It's possible not doing so will get you what you want but it might delay processing.

*yes of course this is a simplification
posted by phearlez at 2:26 PM on March 10, 2009

IANAL, but they cannot threaten you to sign on the spot. Any judge would throw that out immediately.

Yes they can and no s/he wouldn't. Do you think that it's illegal when a car salesman tells you that a price is only good right now and they can't guarantee it if you come back later?

You cannot be required to make an agreement or do anything special in order to collect the money you're legally owed. Ignorant employers sometimes make the mistake of demanding that people sign off on agreements in order to get paid for work they've already done, or tell them they're going to hold their pay till they return some company property. They can't do that, and for the most part the law is very worker-friendly on issues of compensation.

For the most part, however, severance pay IS NOT NORMAL PAY. It's excess compensation in exchange for something. It is at the employer's discretion to offer it or not. Wikipedia makes a sloppy cultural definition [completely without cite, you'll notice] but dictionary.com's definition (credited to Random House) gets it right.

money, exclusive of wages, back pay, etc., paid to an employee who has tenure and who is dismissed because of lack of work or other reasons beyond the employee's control. (emphasis mine)

Now, there are some laws here and there like the WARN act that cover certain kinds of workers and require advance notice. There are sometimes employment agreements like the one discussed here that provide for financial penalties if something previously agreed upon is not done.

But employer can and often do put contracts in front of departing workers offering them some additional consideration in exchange for making an agreement and say this is a one-time-only offer that is withdrawn the moment you walk out that door.
posted by phearlez at 2:52 PM on March 10, 2009