What rights does the employee have after being laid off?

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What rights does the employee have after being laid off?

An employee took an advance while employed. The employer then laid off the employee a year later. Nothing was discussed in the exit interview about paying back the advance. The employee was given severance pay and vacation earned pay at time of lay off. Now, 4 months later, the employee has now been sent a nasty letter saying to pay back advance or legal action will be taken. What rights does the employee have? This company has no written policy and has given 1099’s Misc to former employees who had advances and no longer worked there. Shouldn’t this have been taken care of during exit interview? What should this employee do?

Asked on April 25, 2017 under Employment Labor Law, Louisiana

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

While it would have been better to have discussed the repayment of this advance at your exit interview, your employer was not legally required to do so. The fact is that this advance constitutes a loan and loans must be paid off. If you do not repay, then your ex-employer can sue you in court. Note: While a creditor has a limited period of time in which to file suit over an unpaid debt (i.e. the "statute of limitations"), in LA, the S/L for this type debt is 10 years.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

An advance is a loan; a loan must be repaid. Without disagreeing that it would have been better to have addressed this during the exit interview, the failure to do so does NOT give up the employer's right to have the advance repaid; not addressing a debt at the earliest or most logical point does not waive any rights in regard to it. If it is not repaid, the employer could sue the former employee with a very good chance of winning.


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