Severance pay is given to a departing employee in addition to any other wages owed. It is based on past work, usually to reward service. Severance pay is not mandatory in Texas, but these types of agreements could be beneficial to both employers and employees in certain situations.
If you are wondering how to utilize this document for the benefit of your business, a Texas severance agreements lawyer can advise you. Let a knowledgeable attorney at Sparks Law give the guidance you need.
Texas also recognizes wages in lieu of notices, which is a payment to an employee after termination and is not based on a formula. It is just the amount an employer may arbitrarily decide to grant after terminating an employee to make up for not giving notice of termination. This grant is not enforceable under the Texas Payday Law because the employer was not obligated to provide it. Essentially, it is a gift, while severance agreements are contracts. However, under the Texas Family Code, the two are treated similarly in garnishment situations.
Both severance pay agreements and wages in lieu notices are treated similarly under Texas Family Code § 158.214(b) if the employer is garnishing the employee’s wages for child or spousal support. For example, if the court order demands the employer deduct $500 per month for child support and the employer pays the employee three months salary as severance or wages in lieu, the employer must hold out and remand to the court $1500 to satisfy the judgment. A Texas attorney could further explain the differences in payments made to employees post-employment.
Contracts are documents used in business to legally bind the parties entering them. In exchange for something valuable, each party gains something else of value. Employees who sign severance agreements usually agree they will not discuss the company, especially in any negative light, and they will not compete with the former employer by taking a job with a nearby business rival. In return, the employer gives up additional money or benefits.
Employers cannot withhold wages already owed to employees until they sign a severance agreement. This would make the agreement invalid because the employer would not be giving up something additional of value. The pay is already owed to the employee. An attorney at our Texas office could ensure that a severance agreement meets all the legal requirements and benefits both parties.
Under the Older Workers Benefit Protection Act (OWBPA), the federal government provides for some terms to be present in severance agreements when the employee waives the right to sue. Employers should be aware that:
Employers who do not address the OWPBA language in severance agreements are targets for employees. If challenged, the courts will likely determine the severance contract to be invalid. A diligent local attorney could include OWBPA language in all severance agreements to ensure that they hold up in court.
If you are offering contracts to departing employees, let a Texas severance agreements lawyer help draft an airtight document to benefit all parties. At Sparks Law, our skilled attorneys are standing by to answer your questions. Call for your initial consultation today.