Severance pay

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  • (a)

    • (1) No later than one pay period the termination, the employer shall pay every affected employee a severance payment equal to one week's pay for every year of service with the employer. Severance pay for service in months over a year must be prorated accordingly; but a labor union shall have the right to negotiate for additional benefits for its membership The severance pay must be, calculated at the average weekly wage during the year prior to termination.

    • (2) All employer records, including personnel and payroll records for each employee, must be kept for at least three years following the closing or partial closing of the business, or the employee's termination. The records must be made available to the Commissioner for review and reproduction.

    • (3) In the event of a sale, the original owner may elect to pay the employees according to this section and terminate them, or sell the company to the successor with the liability pending. If the latter occurs, the successor shall assume the liability for all the prior years of service for each retained employee, along with any years accumulated moving forward.

  • (b)

    • (1) The severance pay to eligible affected employees mandated by subsection (a) is in addition to any final wage payment to the employee.

    • (2) The rights and remedies provided to employees by this chapter are in addition to, and not in lieu of, any other contractual or statutory rights and remedies of the employees, and are not intended to alter or affect such rights and remedies, except that the period of notification required by this chapter runs concurrently with any period of notification required by contract or by any other law.

    • (3) This section may not be construed as limiting or modifying any provision of a collective bargaining agreement which requires notification, severance payment or other benefits on terms that are more favorable to employees than those required by this chapter.

  • (c) Any employer who violates the provisions of this section is liable to the employee affected in the amount of the employee's unpaid severance pay.

    • (1) Action to recover the liability may be maintained against any employer in any court of competent jurisdiction by any one or more employees for and on behalf of themselves and any other employees similarly situated.

    • (2) A labor organization may also maintain an action on behalf of its members.

    • (3) The court in such action shall, in addition to any judgment awarded to the plaintiffs, allow a reasonable attorney's fee to be paid by the defendant and costs of the action.

  • (d) The Commissioner may supervise the payment of the unpaid severance pay owing to any employee under this section. In any investigation or proceeding under this section, the Commissioner shall have, in addition to all other powers granted by law, the authority to examine books and records of any employer affected by this section. The Commissioner may bring an action in any court of competent jurisdiction to recover the amount of any unpaid severance pay. The right of an employee to bring an action provided by subsection (c)(1) terminates upon the filing of a complaint by the Commissioner in an action under this subsection. Any sums recovered by the Commissioner on behalf of an employee pursuant to this subsection must be held in a special deposit account and must be paid, on order of the Commissioner, directly to the employee affected.

  • (e) There is no liability under this section for severance pay to an eligible affected employee if:

    • (1) Relocation or termination of a covered facility is necessitated by a physical calamity;

    • (2) The employee is covered by, and has been paid under the terms of, an express contract providing for severance pay that is equal to or greater than the severance pay required by this section; or

    • (3)

      • (A) The employee accepts employment at another location that is owned by the employer.

      • (B) An employee may not be considered to have experienced an employment loss negating the notice requirements, if the closing or layoff is the result of the relocation or consolidation of part or all of the employer's business and, prior to the closing or layoff the employer offers to transfer the employee to a different site of employment within a reasonable commuting distance with no more than a 90-day break in employment, and the employee accepts within 30 days after the offer or after the closing or layoff, whichever is later.


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