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Can an employer refuse to pay agreed-upon severance compensation?

On Behalf of | Jul 17, 2023 | Severance Agreements

When a worker transitions from one company to another, there can be some financial challenges involved. Especially if a worker does not have much advance notice of the end of their employment with one company, they may have to accept a lower-paid position elsewhere or may find themselves in an awkward scenario in which they may go months without obtaining a new job.

Many professionals in well-compensated careers protect themselves against the sudden loss of their job and the inconvenience that could follow by negotiating a severance package with their employers. Also called separation agreements, severance pay agreements help ensure that someone will have money to pay their bills and potentially retain access to health insurance and other key benefits for at least part of their transition after leaving a job.

What rights does a worker have if their employer refuses to pay their severance pay after they lose or leave their job in Ohio?

They can seek to enforce the agreement

Technically, neither federal employment laws nor Ohio state statutes specifically require that employers offer severance pay. However, when employers negotiate a contract with their workers that includes a provision for severance pay, they should uphold that agreement. Additionally, workers shouldn’t have to release an employer from liability for violating employment laws to receive their severance pay.

A worker whose circumstances align with the separation agreement or severance pay agreement that they negotiated shouldn’t have to worry about their employer refusing to make payments. The more documentation worker has affirming their agreement on the circumstances at the time of their termination, the better their position will likely be if they initiate civil litigation against the company and request that they receive the severance pay that they initially agreed upon.

Negotiations related to severance packages and other issues that arise during the termination of someone’s work arrangements can often prove challenging, as workers may struggle to keep their emotions in check when their professional future and finances are at risk. They may also have a hard time making sense of state and federal rules about severance pay.

Understanding one’s rights is a key step for those that want to hold a business accountable for violating its employment contract with an employee. Seeking legal guidance is a good place to start.