Severance pay is administered to employees who are terminated from their job due to no fault of their own. The pay is provided by the employer, which typically has some type of severance pay policy in place at the company. Here is a brief overview of severance pay in California.
Employers are not legally required to pay their employees severance, but they choose to issue severance pay to their terminated or laid off employees. When severance pay is issued, the employer typically does so based on a formula they create that takes into account how long the employee was with the company.
Some companies will offer their terminated employees a lump sum payment of the severance. This is when the company would rather calculate the amount of severance and issue one check instead of making smaller payments over the span of a year or two.
Companies have also been known to offer their terminated employees continuance of salary. This is where the company continues to pay the employee’s salary, and even benefits, for a determined amount of time. Typically the time is until the employee finds a new job. When continuance of salary occurs, the employee typically cannot file for unemployment compensation from the state of California.
There are very few laws in place that allow employees to “cash in” their unused sick and vacation days when they are terminated. Check with your employer on such a policy if you are terminated.
Dealing with being laid off is stressful and emotional. It’s best to consult with an employment law attorney in Sherman Oaks to determine if being terminated was warranted and did not break any laws.
Source: Workplace Fairness, “Severance,” accessed July 14, 2017