With as much time as American workers spend on the job, it’s no surprise that many laws and regulations are needed to keep workplaces safe and to provide appropriate protective measures for both employees and employers. The fact of the matter is that the overwhelming majority of workers in this country put in more than 1,700 hours annually at their place of employment. These numbers have been consistent over the last several decades, showing that the lives of millions of Americans could be impacted by an unsafe workplace. For this reason, we have many laws in place that are designed to protect the employee/employer relationship and lay the groundwork for success for both parties. We will discuss some of the existing laws that cover employee contracts and severance pay in more detail below.
When an employee accepts a job, a relationship is entered into by both parties. In some cases, this relationship may be a verbal understanding. In other cases, a legally binding employee contract may be filled out and signed by both parties in this arrangement.
Written employee contracts can provide important details regarding the terms of the job being acquired. For example, it could include the time frame the job is expected to last, information regarding the rate of pay, any applicable employee benefits, and specific grounds for immediate termination. Employee contracts can be very useful in limiting disagreements between fellow employees. These contracts can also establish the rights of each party in writing, ensuring everyone has a fair understanding of their specific responsibilities in making the relationship a success.
Many jobs, on the other hand, are considered cases of “at will” employment. This means that no formal written employee contract was filled out by either party. Rather, the two parties enter into a spoken agreement that the employee may quit his job at any time and for any reason. On the other hand, the employer also maintains the right to fire the employee for any reason, except those which would classify as discrimination. Under the specific requirements set forth by existing legal statutes, if a formal employee contract is filled out, it is required to have provisions for the following three things.
* It must stipulate either a lump sum payment or percentage of wages earned to take the place of an employees right to sue for discrimination in the future.
* It cannot force an employee to waive any rights that might come up down the line.
* It has to fully comply with all current state and federal laws governing workplace relationships.
In the majority of cases, employers are not required to have a severance pay policy for employees who quit their jobs. When an existing employee decides to quit his job, the only thing most employers are legally required to do is pay for any work completed up to that date and any accumulated vacation time. Further severance pay over and above those requirements are decided at the discretion of each employer. That said, if a company plans to undergo mass layoffs during times of financial stress, they’re required to give employees a 60-day notice of this intent or continue paying the employee’s set salary and benefits for 60 days.
In companies that do offer severance pay, it can either be paid as one lump sum, or it can be divided into equal monthly payments that are paid out over a period of time. If a worker wishes to also take advantage of unemployment until he finds a new job, it is best to accept severance pay in the form of one lump sum. In some cases, an employer will even continue paying the previous employee’s health insurance, but the employee may be responsible for all the premiums. Employees may also be able to successfully negotiate that their employer continues paying their health insurance and premiums for a specified set period of time that is mutually agreed upon.
Overall, severance pay is averaged at about 2.5 weeks of pay per year of service to the company. In some cases, it could be slightly more or less than this amount. Employees may be able to keep their unvested interests such as 401(k), stocks, and deferred compensation. A qualified legal professional can help an employee get the most out of their severance pay agreement.
With American workers spending over 1,700 hours on the job each year, it just goes to show that protective policies are needed to ensure safe working environments for all. Over 85% of men and over 65% of women exceed 40 hour work weeks, meaning a substantial amount of time is spent in the work environment. If this environment is not safe and the rules governing working in it are not reasonable, much harm can come to workers over time. Whether physical injuries, stress, or other types of harm, we can be thankful that we have legally binding regulations in place to serve as a protection to both employees and employers. That said, proving that an injustice was done from either party can be a difficult process requiring the skill of an experienced attorney. With a skilled attorney and laws on their side, those who have been harmed by unsafe or unjust work practices can seek legal help for the harm they have undergone.
About Jeremy Goldstein
Jeremy Goldstein is a successful partner at Jeremy L. Goldstein & Associates. His firm is a boutique law firm that dedicates its resources to corporate governance issues, matters affecting compensation, and committee advising efforts. Jeremy Goldstein experienced success working amongst the law firm Wachtell, Lipton, Rosen & Katz prior to starting up his own independent firm.
Jeremy Goldstein is well-known for his involvement in some of the largest legal cases that have transpired over the last decade. These cases involve corporations such as Duke Energy, Verizon Wireless, NYSE Group, Cingular Wireless, and J.P Morgan Chase to name a few. Jeremy Goldstein also serves on several committees and is the Chair of the Mergers & Acquisition subcommittee of the business sector associated with the American Bar Association. He often engages in public speaking ventures where he spreads knowledge regarding governance and compensation issues that affect American workers and business owners today. Jeremy Goldstein continues to lend his expertise to help promote a good relationship between employers and employees on a global scale.