Losing a job in Florida can lead to financial hardship. The web site moneyrates.com ranked Florida in the bottom half of all U.S. states in terms of cost of living; therefore, the bills can add up quickly when the paychecks stop. It does not help that Florida is an at-will work state, which means your boss can send you packing without needing to provide a reason. To ease the pain and avoid potential litigation, some Florida companies pay severance to employees who are laid off or fired. Severance pay provides money to fill the gap in employment for workers who will need to find new jobs. According to the Florida Small Business web site, most of the state’s firms pay terminated employees the equivalent of two weeks of their regular pay, and some award an extra week of pay for each year that the worker was employed at company.
Fair Labor Standards Act
Florida’s employers must abide by the federal Fair Labor Standards Act, which establishes laws on minimum wage and overtime pay. According to the U.S. Department of Labor, the FLSA does not address severance pay. Instead, it refers to severance as an agreement between an employer and an employee, or the employee’s representative. However, the Department of Labor says the federal Employee Benefits Security Administration may provide assistance to employees who were denied severance that was guaranteed under employer-sponsored plans. The EBSA supports workers in matters related to their job benefits.
State laws in Florida make it an at-will work state, and employers can fire workers without cause. The state’s laws do not require severance for any employee except when both employer and employee have agreed to a contract that includes severance. When a contract requires severance, employers must abide by the contract’s terms and pay it. An employer also must pay severance if it has established a policy regarding paying severance to employees. If the employer pays severance to one employee under such a policy, the employer will be expected to pay severance to all employees. However, employers may establish a policy whereby employees terminated for cause are not paid severance. According to the Florida Small Business web site, selecting which workers may receive severance can lead to litigation headaches, since employees who are denied severance may file suit. The publication advises Florida's business owners to pay severance to these employees, too.
Terms of Job Loss
Florida’s laws on severance pay only apply when an employee is laid off or accepts early retirement. If you quit your job, you are usually not eligible for severance pay, unless your employment contract explicitly states that you will receive it under such conditions. Beginning in 1989, the Worker Adjustment and Retraining Notification Act set additional requirements for severance pay. The WARN Act states that employers who have 100 or more employees must pay employees severance when they fail to provide at least 60 days of notice before a mass layoff. Florida’s employers are subject to the WARN Act and must pay back wages and benefits to workers when a mass layoff takes place without this 60 days of notice. Employees may receive back pay for each day that employers are short of the required 60 days.
Florida’s laws on severance also apply to non-cash benefits. If employers extend benefits to employees as part of established policy or based on the terms of a written contract, the employer is required to abide by those terms with all employees. In some instances, this means extended health insurance benefits. Some employers may also provide career coaching in a severance package.
- U.S. Department of Labor: Wages: Severance Pay
- U.S. Department of Labor: The Worker Adjustment and Retraining Notification Act
- U.S. News and World Report: 3 Severance Pay Questions Every Employee Should Ask
- Florida Small Business: Severance Pay
- Morgan Lewis: The Termination Process
- MoneyRates: Best States to Make a Living
- Askers and Boswell: Florida's Employment At Will Doctrine