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Severance Pay

If an employer gives an employee a severance agreement because they are closing their doors on Nov. 30th. And, then the employer wants the employee to leave sooner than the date on the agreement. Does the employer have to pay that employee to Nov. 30th?

The federal Fair Labor Standards Act (FLSA) establishes compensation requirements affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt.

Non-exempt employees must be paid for all hours worked and must receive time and one half their regular rates of pay for any hours worked over 40 in a given workweek. Most employees are non-exempt. There is no requirement to pay non-exempt employees for time not actually worked.

Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions. Exempt employees must receive their full salary for any workweek during which work is performed regardless of the quantity or quality of work performed. There are limited permissible deductions from an exempt employee’s salary, one of which being during an exempt employee’s initial or terminal week of employment. During either of these weeks an exempt employee’s salary can be deducted to compensate the employee only for time worked.

Thus, there is no requirement for an employer to pay an employee when the employee’s last day of worked as been pushed up. Of course, the severance agreement should be adhered to. So, if the agreement requires compensation up until the 30th then the employer must comply with the terms of the agreement.

This entry was posted on Wednesday, October 11th, 2017 at 2:50 pm and is filed under
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