When a company closes divisions in certain areas, do the employees have any rights to claim severance pay?

UPDATED: Mar 1, 2012

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When a company closes divisions in certain areas, do the employees have any rights to claim severance pay?

The company I used to work for lost it’s contract and eliminated all jobs associated. Do we have rights to severance pay or not? I was a driver for a bus line.

Asked on March 1, 2012 under Employment Labor Law, Connecticut


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Severance is not mandated by law--companies never have to pay or provide severance when there is a lay off, RIF, etc. (They are free to do so, but are not required to.)

There is one semi-exception to the above: if the employer has more than 100 employees and the job elimination affects at least 50, the WARN Act may be triggered. If it is, then the affected employees need to get 60 days notice--or alternately, I believe, 60 days pay. Here is a link to a fact sheet about the WARN Act: http://www.doleta.gov/programs/factsht/warn.htm

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