Legal Question in Employment Law in California
Is it legal for a company to deduct WARN act payments from Serverance packages in California.
For example. Per a company's HR website, an employee is entitled to 120 days of severance pay.as a lump sum payment at the time of involuntary separation due to layoff.
The employee is laid off and the layoff notice says the employee is entitled to WARN pay but any payment made to the employee for WARN will be deducted from the 4 months severance. Net result is that the employee receives 60 days WARN pay and 60 days Severance pay.
Is it legal for a company to do this or should the company have paid 60 days WARN and 120 days severance pay?
Thanks
2 Answers from Attorneys
It depends on what the exact terms and enforceability of the severance plan are. A company is not legally obligated to pay any severance. They are legally obligated to pay WARN if it applies. The company is completely legally entitled to have a severance plan that provides for 120 days severance if WARN does not apply, or 60 days WARN and 60 days severance if WARN does apply. If, however, they legally bound themselves to 120 days severance whether or not WARN applied, then they owe 180 days. Without knowing all the details of the severance plan and how enforceable it is, however, I can't tell you which is the legal result in this particular case.
WARN ACT payments ARE severance, legally required severance. Unless you have a specific contract or written company policy that also requires additional severance, you are not 'entitled' to any.
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