What are My Options if My Employer Will Not Pay Severance?
Are you leaving a company? Whether through a lay off, resignation, or other termination, you may be interested in a severance package. Unfortunately, not all employers willingly offer severance. If your company is not offering any severance pay, you may still not be out of luck. Here, our New Jersey severance agreement attorney explains your options if your employer fails to pay.
Legal Background: Severance Pay is Not Required By Law in New Jersey
As a starting point, it is crucial that workers know the law. Severance is not required by the federal Fair Labor Standards Act (FLSA) or any New Jersey state law. Indeed, New Jersey imposes no general duty to provide severance upon termination. An obligation arises only if the employer agreed to pay severance through an employment contract, offer letter, collective bargaining agreement, or a written policy that creates enforceable rights. Courts in New Jersey will enforce clear severance provisions as a matter of contract. Without a contract, severance is voluntary. Employees generally need to negotiate a severance package.
You Have the Right to Negotiate Severance Pay (or More Severance Pay)
If you were not offered severance, but you wish to obtain it, there are generally three main bargaining chips that you have available. It is crucial that you develop the right negotiation strategy. Here is an overview of the three main bargaining chips that you have:
- Goodwill: A smooth transition has real value. An employee who documents processes, trains replacements, and preserves client relationships reduces disruption. Employers often pay for continuity, especially in revenue-facing or specialized roles. Framing the ask for severance around business risk, not fairness, tends to move the number.
- Release of Claims: A release of claims is the big one. A broad release extinguishes potential claims under statutes such as the New Jersey Law Against Discrimination and the Conscientious Employee Protection Act. That release carries quantifiable risk reduction. Employers routinely condition severance on a signed release because it closes the file.
- Other Restrictions: Non-disparagement, confidentiality, cooperation clauses, and post-employment restrictions all have price tags. Employers seek protection of reputation and information. Employees can narrow scope, limit duration, or demand additional compensation in exchange for tighter terms.
If you believe that you have a potential claim against your employer (discrimination, wage and hour, etc), you need to speak to an experienced attorney right away. Your lawyer can help you determine the best course of action for moving forward, including negotiating a broader settlement as part of severance negotiations.
Contact Our New Jersey Severance Pay Attorney for Help
At Poulos LoPiccolo PC, our New Jersey employment lawyer has the skills and experience to represent workers in severance negotiations. If your employer is not willing to offer severance, we are here to help you explore your options. Contact us today to set up a strictly confidential, no obligation case review. We handle severance pay issues statewide in New Jersey.
Source:
dol.gov/agencies/whd/flsa
