Severance

hrdisney

We recently let someone go and we are giving them 4 wks of severance. We are paying the severance out on their last check next week. This individual called me today and said that she thought that it was a MD law that you had to pay severance on the person's last day. I told her that there is no law that we have to give severance let alone pay it out on your last day. Was this correct (we don't have to pay severance on the person's last day)? Thanks

TN HR

Assuming that you're not some sort of farce since this is your first time posting here and the fact that the wording in your post sounds supect, my advice to you is consult with your state's agency responsible for labor and workforce development.

On it's face, the thought of a severance having to be paid on the last day (even in CA) sounds ABSURD. Think about the logistics behind it and I'm sure you will get the picture.

mwild31

Here's the rule in Maryland:

[url]http://www.dllr.state.md.us/labor/wagepay/wagepay.htm#wppayonterm[/url]

"C. Wage Payment at Termination: When Final Pay Due

Each employer shall pay an employee, or the authorized representative of an employee, all wages due for work that the employee performed before the termination of employment, on or before the day on which the employee would have been paid the wages if the employment had not terminated."

The next regularly scheduled payday following termination is all that's required.

As to severance. We always draw up a special, separate, check for severance payments. Namely, because it's not required and when we do provide severance we are also asking the employee to sign a waiver against any future legal proceedings against the company.

Don D

In your question, you indicate that wages earned for work performed will be paid out NEXT WEEK. And you wonder if severance, which is neither earned nor required is due BEFORE YOU PAY THE WAGES YOU OWE THEM? Did you really think this through?