Legal Question in Employment Law in California

Re: Severance Pay with regard to Outsourcing

This response assumes you work for a CA employer within CA. Severance pay plans may be considered employee welfare benefit plans under federal law (ERISA). Generally, many of ERISA protections with respect to entitlement to employee benefits are simply not applicable to severance pay plans. Moreover, employers typically retain control to establish, modify or eliminate altogether the terms and conditions of a severance plan. Thus, discriminatory treatment of certain employees with respect to qualification for severance benefits may be allowed under your employer's severance pay plan under special circumstances. Your employer's severance plan appears to have carved out a condition (continued employment services) with respect to your qualification to receive severance benefits, even though this same condition may not apply to other employees. On the other hand, your employer may have misunderstood the application of ERISA protections to you. Thus, you may want to consult with a local employee benefit attorney regarding your concerns before taking any action.