Losing your job can be one of the worst things that can happen to you. From a financial standpoint, joblessness can result in an immediate strain on you and your family. From a purely medical standpoint, the stress of being fired begins to mount and can result in deep depression.
Adding insult to injury, many employers will tend to shortchange employees upon firing. This can often take the form of not timely paying their prior-earned wages or going back on severance agreements. Knowing your rights can help you better recover from your recent job-loss.
The Difference Between Earned Wages and Severance Pay
Upon termination, employers owe the terminated employee all wages for any work that was performed prior to the firing. “Earned wages” is essentially legal terminology that means wages that were earned but were never actually paid. It is incredibly common for employers to either purposefully or inadvertently forget to pay a terminated worker their earned wages.
Severance pay, on the other hand, arises from a contractual agreement that you make with your employer upon your firing. Under the terms of that contract, your employer agrees to provide you with benefits or payment in exchange for you agreeing to waive all legal claims that you might have against your employer. The key difference between earned wages and severance is the source of the obligation: earned wages are required to be paid because they are wages (it’s the law), whereas severance pay is only required to be paid when you and your employer agree on the terms in a severance agreement. Both concepts involve legal obligations that the employer owes to you, but the obligations are slightly different.
The Right of Employees to Earned Wages Reclamation
As explained previously, the right to earned wages does not come from an employment contract or the circumstances of one’s employment, it comes directly from the letter of the law. Under the Federal Fair Labor Standards Act and New York Labor Laws, employers have a legal obligation to pay employees for the work that they have performed. The right to payment is unquestionable and is unaffected by the termination of an employee. A terminated employee has a right to any wages that he or she had earned prior to being fired. Often, employers either do not know that this is the case or they choose not to pay their employees for their work out of spite or anger (often resulting from the circumstances of the termination).
A terminated employee, therefore, has a legal right to seek any earned wages from an employer. In some cases, writing a strongly-worded letter to your former employer will be enough to convince them to pay up. However, in many cases, former employees may have to go to court to recover wages that they are owed.
Enforcing Your Severance Agreement: What Happens When Your Employer Never Pays
As discussed above, a severance agreement is a contract between you and your employer. If your employer does not honor the terms of your severance agreement, you can bring a lawsuit against your employer for breach of contract. If your union helped you negotiate a severance agreement, that could create additional issues with your employer, so make sure to bring the problem to the attention of your former union boss.
If you have been fired and have reason to believe that your employer has short-changed you, you should contact an experienced employment attorney to review your options. The Law Firm of Yuriy Moshes offers free consultations for victims of employment-related wage theft and we can help you evaluate your legal case and file for unemployment benefits.