Was it legal if the company I worked for filed for bankruptcy and laid us off didn’t offer packages or pay any unused PTO?

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Was it legal if the company I worked for filed for bankruptcy and laid us off didn’t offer packages or pay any unused PTO?

Asked on July 27, 2015 under Employment Labor Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) It is perfectly legal, unless you a written contract (including a union or collective bargaining agreement) requiring them to provide severance packages or pay out unused PTO. In the absence of such a written agreement, the law does *not* require provision of packages, payment of severance, or payment on termination of employment of unused PTO.

2) Even if you had a written agreement requiring the above, all debts, including debts to employees, are subject to modification and/or discharge in bankruptcy (though many employee debts are higher priority, or paid earlier, if there is any money, than other debts, such as unsecured debts to vendors). Furthermore, if the company is insolvent and has too little money, income, or assets to pay its employees, they won't get money--you can't get money when there is none.

Therefore, it is very likely you are not entitled to, and/or will not receive, anything, in this case, unfortunately.


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