We are disappointed to inform you that as a result of the bankruptcy ... Lehman Brothers is unfortunately no longer able to provide the salary continuation or other payments described in your separation agreement.' - letter sent to fired workers, Sept. 30, 2008
Thousands of workers every week these days are coping with the pain of hearing, "You're fired."
For some, the pain quickly gets much worse: They learn that the severance checks they were promised won't be coming. And the benefits that were supposed to continue are ending, too.
While employers usually offer severance as an act of goodwill and to maintain a degree of loyalty, New York State employers are generally not obligated to provide it. Even if they do, there are an increasing number of cases in which they can legally go back on their word.
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Larger employers are far more likely to offer severance than smaller ones. But not all big organizations choose to help involuntarily departing workers: One in five skip it, according to a study last year by WorldatWork, an association of human resources professionals.
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In certain circumstances, employees given the shaft might have a shot of getting back some of their promised severance.
Under the federal Worker Adjustment and Retraining Notification Act, large employers are required to give employees 60 days notice of mass layoffs.
Attorney Jack Raisner of Manhattan firm Outten & Golden is representing a group of former Lehman Brothers employees terminated last September who claim Lehman violated the notification law and owes them 60 days of wages and benefits.
"In a bankruptcy such as Lehman's," Raisner argued, "all is not lost for the employees with WARN claims and fairly recent unpaid wages or benefits claims. Those claims are given a priority over most other creditors, and so are most likely going to be paid if there are assets in the bankruptcy estate."
If you find yourself pushed out of your job and offered severance, you'll likely be presented with a package that includes a continuation of your salary for a set period of time, and benefits such as health insurance and outplacement services.
Nearly one-third of employers polled by WorldatWork offer one week's salary per year of service, while one out of five provide two week's salary for every year.
In most cases, you can legally collect unemployment insurance benefits while receiving severance payments.
Expect to have to sign away your rights to sue, and you may even have to agree to refrain from saying anything bad about your former employer.
If you're offered a buyout package, essentially a voluntary severance agreement, consider your chances at finding another job quickly or whether you can retire comfortably, said financial planner Michael Goodman. If job cuts are looming where you work, it might be a good time to take the money and run.
5,000 workers were let go in the months leading up to the bankruptcy filing on Sept. 15, 2008.
25,000 were employed worldwide at the time of the bankruptcy.
9,000 employees, mostly from the New York area, were hired by Barclays. Soon after, that firm laid off several thousand workers.