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Do I Have To Give a Terminated Employee Severance or Benefits?

When an employee is being terminated from your company regardless of how long they have been there, there may be a situation where you may want to provide them with some sort of severance pay going forward. Typically, you are not obligated to do that unless there is a contractual provision that requires it or unless you are treating that employee differently than you have treated other employees in the past and that treatment could result in some way shape or form in some kind of lawsuit or claim in an agency against you. This might typically arise in a situation where an employee suddenly is not being offered a severance package and the employee is going to claim that it’s based on. For example, his or her gender or his or her race or national origin or one of the protected categories in the law. Overall generally speaking you don’t have an obligation to give severance pay or a severance agreement to an employee who has been terminated but when you contact an attorney and discuss with them the circumstances of that employees termination and that employees employment history and whether there has been any kind of personal file notations about the employees actions over the course of their employment. For example, that could have led up to termination, you might want to seek that advice prior to engaging in the act of termination because severance agreements can help you move forward in a way that you know that you are certain that employee is not going to come back to you and sue the company for some type of illegal action. There are different statute limitations that apply to the employment claims and sometimes employees can have as much as six years, for example, if there is a breach of contract claim to sue the employer. One of the advantages of giving a severance pay or severance package to an employee who is being terminated is that you know once that employee signs that agreement that employee is not going to be able to sue you down the road and you are freeing up the risk of going forward in a situation where you might be incurring legal cost and defending a claim or you might be facing damages in a perspective of unlawful termination claim.

This informational blog post was provided by Kim Berg, an experienced White Plains, New York Employment Attorney.

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