What is a California severance agreement?
A California severance agreement is also known as California termination and separation pay. This is paid by YOU the California employer to your employees in the event of separation. However, if an employment contract exists, you are NOT required to provide employee benefits including the severance pay.
California employees are often offered severance pay in exchange for a general release of all claims, as well as an arrangement not to litigate in the future against the employer. Since you need the employee to agree to your terms regarding your California severance agreement, it is crucial to be guided by attorneys who specialized in assisting California Employers.
When does a California severance agreement take effect?
For a California severance agreement to be binding there should be an offer, acceptance, and consideration or compensation. During this process, it is common for employees to release their employers from known and unknown claims against their employer. Also, employees should have no outstanding loans to their employers. Furthermore, the employees should keep the California severance agreement confidential and they can also agree to other things as long as it is not against California Labor Law.
Employers can agree to allow employees to work up to a certain date and have a lump sum of compensation in exchange for some conditions fulfilled by the employees. Issues between the employers and employees can also be solved at once using the California severance agreement to settle their claims and providing agree upon compensation.
Disqualification of Unemployment Insurance Benefits
The California severance agreement is not grounds for disqualification of unemployment benefits. This is a common concern of California employees facing layoff. Under the California Law, your employee accepting a California severance agreement package from you, does not prevent employees from claiming their unemployment insurance benefits. But, there is a potential exemption. A willful acceptance of misconduct can impact the employees’ claim for unemployment benefits and California severance agreement package. California Employers should be aware of this since, it can be a basis of you not having to provide the benefits to your former employee.
What Employees Release in a California Severance Agreement
In a California severance agreement, employees are expected to release their employers including but not limited to sexual or other harassment, claims of discrimination, wrongful termination, breach of agreement and other allegations.
A California severance agreement can be very complicated in some cases but it may be the best tool in some scenarios for dealing with a California employee. It is highly recommended to seek a California Employer Attorneys advice during this process.
Contact us today if you need an attorney who specializes in protecting California Severance Agreements!
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