Disallowing Severance Pay May Violate ERISA — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Disallowing Severance Pay May Violate ERISA

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in Human Resources

Severance plan documents sometimes stipulate that employees who are fired "for cause" are disqualified from benefits. That places a burden on plan administrators to fairly review the facts before making a benefits determination. This includes checking out the employer's policies, procedures, and enforcement. If an employer was lax in any of these areas, and benefits were denied, they may be called on the courtroom carpet for violating the Employee Retirement Income Security Act  (ERISA).

 

Nosy, Yes! Misconduct, No!

An employee was told she would receive severance benefits if she were terminated within two years of a merger with another company. Before the severance period ran out, the 23-year company veteran was fired "for cause" after she accessed a manager's folder that contained performance information about other employees. The file, which was stored on the company's shared computer drive, did not re...(register to read more)

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