California law does not mandate severance pay.
If you have been fired or laid off from your position, you may be wondering if you are entitled to any type of compensation under California law. Generally, your employer must pay you for all of the hours that you have worked, as well as for unused vacation time. Beyond that, your company is not required by California law to pay you any type of severance.
Nevertheless, some employers may offer employees a severance package to employees who have been terminated. This often happens when an employee has been with the company for a long time. In exchange for this severance package, employers will typically require you to sign a severance agreement. Because these agreements may involve giving up important rights, you should always consult with a seasoned California employment attorney before signing.
Severance pay is a form of compensation that is paid to an employee by an employer — over and above the employee’s regular pay. It is intended to give employees a financial cushion, and typically comes in a lump sum. Neither California nor federal law requires employers to pay employees severance. However, employee handbooks or an employment contract may set out details about severance pay. When severance pay is combined with benefits — like health insurance or job training — it is usually referred to as a severance package.
In most cases, employers will ask employees to sign an agreement in order to receive their severance pay or package. These agreements may ask an employee to give up the right to file a lawsuit for employment discrimination, harassment, or wrongful termination. It may also forbid the employee from talking about the events leading up to the firing or about the agreement itself.
Under both federal and state law, employees cannot waive certain rights, such as the ability to bring a wage and hour lawsuit or to be a whistleblower. However, as long as you enter into the agreement voluntarily, other waivers will likely be legally binding. For this reason, you should ask a California employment attorney to review it. A lawyer can review the agreement, suggest changes, and advise you of your rights and options under the law.
At the same time, a California employment attorney can explore the circumstances of your termination with you to determine if there is any basis for a lawsuit. While in many cases, a lay off is just a lay off, there may be situations where an employee is fired illegally — and an employer offers a severance package as a way to avoid a legal claim. By working with a lawyer, you can ensure that your rights are protected.
At PLBH, we advise clients on a wide range of employment issues, including those related to discrimination, harassment, and wrongful termination. If you have been fired and your employer asked you to sign a severance agreement, reach out to our law firm today at (800) 435-7542 or info@plblaw.com to schedule a consultation with a member of our team.