Severance pay in New York

Severance agreements, Non-compete and Non-solicitation agreements, and Professional Services contracts

Courts like to enforce contracts. All types of contracts.

Not knowing the impact of signing something is rarely an excuse.

Although New York favors everyone’s ability to earn a living, that does not mean that anything goes. If someone is given access to confidential information or resources they can not unfairly use that information against any employer who trusted them with confidential information. 

Court decisions seem to be trending in favor of enforcing contracts between parties whether those contracts are collective, private, or negotiated. A bargain remains a bargain even if one side experiences remorse later. That makes legal review so much more important.

Every severance agreement should be reviewed by legal counsel because Employee Choice Doctrine is good law in New York. The non-compete agreement you were told was not enforceable may become enforceable once you accept severance pay and ratify a document which would otherwise have been overly broad or restrictive.

  • You should never sign a legal document without legal review
  • Your employer is giving you something in exchange for your waiving legal rights
  • This is your last chance to ask for any amendments to that agreement.

No laws require private employers to pay any employee severance pay.

There is no state or federal law which requires your private employer to pay you severance pay.

It is highly unlikely that you will be able to successfully argue that you did not know what you were signing or that you signed under duress.

Can you negotiate a higher severance amount?

Everything is negotiable.

But negotiability depends on the facts of your particular employment situation.

There is never any guarantee that you will recover more money. However, without having an employment lawyer read your entire proposed severance agreement or contract and ask you questions you will never know whether signing the agreement was your best choice.

Severance agreements are all unique.

Will you be able to discuss your severance after you sign the agreement?

As a general rule, once you sign a severance agreement you are finished. Most agreements forbid you from discussing the terms with anyone except your accountants and lawyers.

Severance agreements almost always include confidentiality provisions. They often include non-compete and non-solicitation clauses. They usually prevent you from discussing the terms with anyone except legal counsel, accountants, and sometimes immediate family members. You may have agreed to restrictive covenants when you were hired that you no longer recall. Those paragraphs can be difficult to fully understand. Ask an employment lawyer to explain them to you.

The payment and timing of your unemployment benefits is often affected by severance pay.

According to the New York State Department of Labor:

“Your severance pay may affect unemployment benefits. New York State prohibits unemployment benefits until the exhaustion of severance pay if such pay occurs within 30 days of an employee’s last day.

You must notify the Telephone Claims Center if you receive or will receive dismissal/severance pay within 30 days of your last day of employment. This applies even if you receive dismissal/severance pay after you file your claim. If you do not notify us, you may receive an over-payment of benefits, which you will need to pay back. You also may be subject to other penalties.

You will not be eligible for benefits immediately if:

  • You receive weekly dismissal/severance payments that are greater than the maximum weekly benefit rate; or
  • Your employer gave you a lump sum payment and the weekly pro-rated amount of the payment is greater than the maximum weekly benefit rate.

You may be eligible to collect benefits if:

  • The weekly amount of dismissal/severance pay is the same as or less than the maximum weekly benefit rate; or
  • The dismissal/severance pay is stopped and you have enough earnings in the base period to establish a claim.
  • You receive your first dismissal/severance payment more than 30 days after the last day you worked.”

Before you sign any severance agreement take it to employment lawyers for review. 

Urba Law PLLC performs severance agreement reviews, followed by telephone consultations, remotely for all of New York State. Call (914) 366-7366 for details.

Urba Law PLLC performs these reviews for clients around New York State and the country. If your work was performed in New York State or governed by New York Law give us a call.

Documents are often scanned and e-mailed. And payment may be made electronically on-line. Many clients never leave their homes or businesses for such reviews and consultations.

We can be reached at (914) 366-7366 or by e-mail at [email protected]