How to Get Severance Pay From a Company That's Closing Its Doors

In most circumstances, your employer does not have to provide you with a severance package if you lose your job. Furthermore, work-at-will laws in most states enable your employer to fire you without prior notice. However, under the federal Worker Adjustment and Retraining Notification Act, your employer must provide you with 60 days advance notice of a layoff caused by a company's either closing down a facility or ceasing operations altogether. If you do not receive advance notice your employer must provide you with severance pay.

Review the letter or notice that your employer sent you in which you received details of the company closing. If your last day of work as listed on the notice occurs within 60 days of the notice's being issued, contact your human resources department and submit a claim for severance pay. Your employer must provide you with severance pay for up to 60 days as well as keeping your benefits intact until the 60-day period comes to an end.

Go to the website of your state's department of labor and review the rules pertaining to advance notice of layoffs caused by a firm's closing down. In some states, employers are required to give more than 60 days' notice when workplaces are shut down. In New York, for example, your employer must provide you with 90 days' advance notice and you are entitled to up to 90 days of severance pay if your employer fails to provide adequate notice.

Ask your HR manager if other employees are receiving severance packages. Under state laws, you may have the option of suing your firm for discrimination if your employer selectively offers severance package to some full-time employees but fails to provide compensation for others who have similar tenure.

Contact your boss and request severance pay for yourself and your fellow workers. Some firms have rules in place that entitle laid-off workers to severance; even if no such rules exist at your firm, you lose nothing by making the request.

Contact a contract or employment attorney and ask for a free consultation. The attorney can review your state's statutes to see if you are entitled to any benefits or payments as a result of your employer's actions during the layoff process.

Tips

  • If you belong to a union, your union's collective bargaining agreement may include a provision under which your employer must provide employees with severance pay in the event of a plant closing. Your employer must honor such agreements even in the event of bankruptcy, since federal laws require firms to pay wage claims before settling debts with creditors.

    If your employer provides you with at least 60 days of advance notice, you probably have no entitlement to any type of severance pay. You may qualify for unemployment insurance benefits, but these monthly payments amount to much less than your standard rate of pay.

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