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|| SportsShooter.com: Member Message Board
Severence pay?
Mike Strasinger, Photographer
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Nashville | TN | USA | Posted: 10:43 AM on 05.29.09 |
| ->> I just read Brian Blanco's wonderful article on going from staff to freelance,and it made me wonder about severance pay . How does it work? Is the company legally obligated to pay a person something when they are laid off. If so how much? |
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Richard Uhlhorn, Photographer
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Chelan Falls | WA | USA | Posted: 11:48 AM on 05.29.09 |
->> I think it depends on what State you are in. In Washington, they are required to give you at least two weeks pay plus all back vacation time.
If they do decide to give more, I guess that is up to their largness.
Someone talked about negotiating equipment into the severance so a photographer doesn't have to go out and spend a huge amount of cash to gear up.
Good luck if you are in that situation.
Rich |
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Wesley R. Bush, Photographer
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Nashville | TN | U.S. | Posted: 2:59 PM on 05.29.09 |
->> http://tennessee.gov/labor-wfd/lsques.html
No. The State of Tennessee does not have a law that regulates fringe benefits. Company policy would be the determining factor. These and similar matters are also determined by an agreement between the employees and the employer, or their authorized representatives. Title 50-2-103 (3) |
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David A. Cantor, Photographer, Photo Editor
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Toledo | OH | USA | Posted: 8:28 PM on 05.29.09 |
->> "If they do decide to give more, I guess that is up to their largness. "
ooooooohhhhh, I don't like the sound of that. |
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Jeff Stanton, Photographer
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Princeton | IN | USA | Posted: 10:08 PM on 05.29.09 |
| ->> I know the people at the Tucson Citizen received a week's pay for every year of employment up to 26 weeks. I don't know what Arizona law is, but that's what they got. Also, they pay it out in two week increments, instead of a bulk sum. |
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John Petrovic, Photographer
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Prairie Village | KS | | Posted: 10:22 PM on 05.29.09 |
| ->> When I was laid off from The Olathe news (owned by McClatchy) I was given a weeks pay for every year I was there. Sucked but at least it was something. |
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Jesse Beals, Photographer
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Tracyton | WA | USA | Posted: 2:31 AM on 05.30.09 |
->> Richard, were did you see it as the law that they have to give you at least 2 weeks severance for Washington State?
My past employer only gave a few people a severance of two weeks, everybody else was told good luck and good bye. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 7:33 AM on 05.30.09 |
->> From the Washington State department of Labor and Industries:
"Paid vacation, holiday, and sick leave and severance pay are considered voluntary benefits that a business may choose to offer workers. Washington State law does not require a business to provide these benefits. Even though there is no state law requiring a business to pay these benefits upon termination, if the business promises workers these benefits and does not follow through, workers can contact an attorney or file in small claims court for their unpaid benefits."
http://www.lni.wa.gov/WorkplaceRights/Wages/PayReq/FinalPay/default.asp
So the question is - does your employer have a stated severance policy and/or have they made a promise of such benefits to you?
If not...well read the above quote. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 7:35 AM on 05.30.09 |
->> Hate when I hit the enter key too soon -
my post was in response to Jesse's query and obviously not apply to Mike's original question. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 9:11 AM on 05.30.09 |
->> This applies to Mike's original question.
From the Tennessee State Government:
http://tennessee.gov/labor-wfd/lsques.html
"Is an employer required by law to provide paid vacation, holidays, severance pay, sick pay or health insurance?
No. The State of Tennessee does not have a law that regulates fringe benefits. Company policy would be the determining factor. These and similar matters are also determined by an agreement between the employees and the employer, or their authorized representatives. Title 50-2-103 (3)" |
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Tim Vizer, Photographer, Photo Editor
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Belleville | IL | USA | Posted: 10:31 AM on 05.30.09 |
| ->> Thankfully I'm still employed (two rounds of voluntary buyouts and one layoff round - so far) but the package they offered here to everyone, regardless of voluntary or involuntary, was two weeks of salary for each year of service, capped at 13 years (so, 26 weeks pay is the maximum, despite any years of service beyond that). Unsure about any legal ramifications in Illinois though. I do know that the severance pay was taxed at a higher rate, like Brian Blanco explains in his article. I can't figure that out, unless it's because it's a lump sum payout. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 10:49 AM on 05.30.09 |
->> Tim -
The payment is not being taxed yet. What you're seeing is the higher rate of withholding - which you basically see with any lump sum payment. Taxes will be what taxes will be when they actually do their taxes. Since they had a high rate of withholding, they are more likely to get a larger return (or a smaller bill) than they would have otherwise. Where this can really affect you is if you receive the lump sum near the end of a year which is likely to bump you up a couple of tax brackets. |
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Tim Vizer, Photographer, Photo Editor
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Belleville | IL | USA | Posted: 11:10 AM on 05.30.09 |
->> Hey Mark:
Thanks for the info...also, like Brian says in his article, does it make sense to bump up the number of exemptions to 9 to get the most net out of the severance package? |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 5:03 PM on 05.30.09 |
->> Tim -
The short answer is to ask a tax professional (which I am not.)
My opinion -
The amount that is withheld will not change the actual amount of tax that you pay at the end on the year. Remember that if a lump sum is paid in the second half of the year, and/or you are able to quickly regain employment, your incremental tax rate is likely to rise. e.g. For someone receiving 26 weeks of severance, if you get laid off in December with a lump sum, you just got a 50% increase in taxable income for that year.
As such, if you artificially jack up your exemptions you will run the risk of being under-withheld (and the more you add, the worse it will be). If you are way below the tolerance - you'll risk paying a penalty as well. Also, if you haven't recovered financially, you get stuck with a tax bill at a time when it's difficult to pay it. |
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Aaron Rhoads, Photographer
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McComb | MS | USA | Posted: 5:55 PM on 05.30.09 |
->> Wow, 26 weeks of severence pay. You'd think, if company's are so interested in the bottom line, they would get their money's worth and keep you employed for those 26-weeks.
The economy might turn around by then. |
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Dave Amorde, Photographer
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Lake Forest | CA | USA | Posted: 1:32 AM on 05.31.09 |
->> 26 weeks?
I just got laid off from my engineering job. 27.5 years of service, 0, ZERO, weeks of severance. It's a damn good thing I had vacation time in the bank.
To make matters worse, my employer switched 401-K providers the same day, and they required a 60-day "blackout" period where I can't get my funds. |
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Yamil Sued, Photographer, Photo Editor
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Peoria | AZ | USA | Posted: 2:04 AM on 05.31.09 |
->> When I got whacked back in 05, I had been employed for two years, I got 8 weeks of severance pay. Not because it was the law, I don;t know why, nor do I care to know. Some companies do the very least they can to meet state law, some are generous and really feel back to lay you off and some do it out of guilt, because they really don't have a good reason to let you go and they are afraid that you will sue them :D
$ years later, I'm freelancing and I'm quite happy with the state of my business right now, but.... I still miss the biweekly check :D
Y |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 9:22 AM on 05.31.09 |
->> There are many sound reasons for putting severance plans into place. Primary among these is retention - yes, retention. If your employees know that they aren't going to be cut loose with zero, they are less likely to jump ship at the first hint of trouble. Given that the best and the brightest are the best able to do so - and also the ones that an employere would want to stay the longest, a good severance plan is a strong incentive to stick it out.
It is also a good component of any "total compensation" package. If one has choices between employers and one has an established severance plan and one does not, all else being equal, which are you more likely to want to work for.
Then there is the liability issue. Everyone that I know that has received severance has had to sign a release in order to do so. They waived their rights to sue for any reason. Given that older employees are more likely to have longer service (and thus more severance) and are by law a protected class (once you hit 40) under the EEO laws, those waivers are very valuable. Even if such a suit was without merit, the defense costs can be enourmous.
Additionally, there is a huge political issue here. Entities that simply cut their employees loose with nothing don't receive the best press in the world. Providing a fair severance plan goes along way in reducing political backlash. Given that the vast majority of these entities are continuing on in business, being viewed as reasonable and fair in these unfortunate situations can be quite important. |
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Richard Uhlhorn, Photographer
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Chelan Falls | WA | USA | Posted: 11:08 AM on 05.31.09 |
->> Hey Mark... Thanks. I stand corrected. I received two weeks severance and two weeks vacation pay when I left the Lake Chelan Mirror in 2003. I should have checked the WACS before spouting off, but I thought it was standard here. Guess not.
Cheers Rich |
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