question on severance and starting new job

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cgn919
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question on severance and starting new job

Post by cgn919 » Mon Sep 06, 2010 3:16 pm

My spouse's employer announced that their work site would be closed in a few months. Employees were given new work responsibilities transitioning their job functions elsewhere within the company, and offered retention bonuses and severance pay for those who stay until the announced separation date. If you leave the company before the separation date, you don't get the retention bonus and severance.

My spouse has been lucky enough to find another job quickly, and the new employer has agreed to a start date the next workday after the separation date (which is still about 3 months away). My spouse has about a month's worth of vacation time accrued, which would be paid upon leaving the company. We are wondering whether it would be a good idea to take vacation time during the last month before the separation date, and start working with the new employer that month. The concern is this might technically be considered having left the current job early, and we do not want to lose the retention bonus and severance pay.

In case it matters: my spouse is considered an hourly (non-exempt) employee. As far as I know, there is no written company policy against moonlighting or co-employment--but we aren't sure whether it would be advisable to ask HR this question.

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dm200
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Re: question on severance and starting new job

Post by dm200 » Mon Sep 06, 2010 3:34 pm

cgn919 wrote:My spouse's employer announced that their work site would be closed in a few months. Employees were given new work responsibilities transitioning their job functions elsewhere within the company, and offered retention bonuses and severance pay for those who stay until the announced separation date. If you leave the company before the separation date, you don't get the retention bonus and severance.

My spouse has been lucky enough to find another job quickly, and the new employer has agreed to a start date the next workday after the separation date (which is still about 3 months away). My spouse has about a month's worth of vacation time accrued, which would be paid upon leaving the company. We are wondering whether it would be a good idea to take vacation time during the last month before the separation date, and start working with the new employer that month. The concern is this might technically be considered having left the current job early, and we do not want to lose the retention bonus and severance pay.

In case it matters: my spouse is considered an hourly (non-exempt) employee. As far as I know, there is no written company policy against moonlighting or co-employment--but we aren't sure whether it would be advisable to ask HR this question.
It all depends on what the current employer is trying to accomplish. Generally, a "retention" provision is given because they want to work until the separation/layoff date. This sounds like a good deal for her, a very good deal in fact. I would not do anything to risk it.

teacher_in_tx
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Post by teacher_in_tx » Mon Sep 06, 2010 3:52 pm

In case I missed the obvious, if she stays until the end, is she paid in full for her banked vacation time?

-mike

kenbrumy
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Post by kenbrumy » Mon Sep 06, 2010 3:57 pm

I've been in a similar situation. I suggest you take a vacation early in the process if you really want to take a vacation. Don't try to play games with vacation time to start the new job early. Bless your wife's new employer for their kindness.

What will probably happen is that your wife (and most everyone else) will have transitioned well before the cutoff date. When the employer sees this, they will probably offer to let people leave early with both their severance and retention bonus. They have to offer. If someone is seen pushing for it, some AH HR person will look at getting a gold star by stiffing them.

I had one company tell us we could leave whenever our boss "certified" we had completed our duties. We got paid through the original end date even though almost everyone had been gone a week or two early. The employer was getting anxious with all the people just laying around just to get the severance. Thefts were running rampant and only employees could pull them off.
Last edited by kenbrumy on Mon Sep 06, 2010 4:00 pm, edited 1 time in total.

kenbrumy
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Post by kenbrumy » Mon Sep 06, 2010 3:59 pm

teacher_in_tx wrote:In case I missed the obvious, if she stays until the end, is she paid in full for her banked vacation time?

-mike
It was in the OP post. It's also Federal law. Vacation time is "earned" so she'll get paid for it Sick pay isn't so if his wife has any it's a use it or lose it proposition unless the employer has a separate policy.

teacher_in_tx
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Post by teacher_in_tx » Mon Sep 06, 2010 4:13 pm

kenbrumy wrote:
teacher_in_tx wrote:In case I missed the obvious, if she stays until the end, is she paid in full for her banked vacation time?

-mike
It was in the OP post. It's also Federal law. Vacation time is "earned" so she'll get paid for it Sick pay isn't so if his wife has any it's a use it or lose it proposition unless the employer has a separate policy.
Thanks! I completely did miss the obvious in the OP's post. =P Thanks for expanding on the law.

-mike

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dandan14
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Post by dandan14 » Mon Sep 06, 2010 4:20 pm

kenbrumy wrote:I've been in a similar situation. I suggest you take a vacation early in the process if you really want to take a vacation. Don't try to play games with vacation time to start the new job early.
I agree. Don't walk to close to the fire on this one. Accept the gift that they are giving you. If you want the vacation, take it before the very end.

I had a similar situation in 2008. My feeling was that the vacation would mysteriously vanish if I waited too long. Those final weeks before a layoff are surprisingly busy -- bringing new people or teams up to speed.

JW-Retired
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Post by JW-Retired » Mon Sep 06, 2010 6:00 pm

cgn919 wrote: We are wondering whether it would be a good idea to take vacation time during the last month before the separation date, and start working with the new employer that month. The concern is this might technically be considered having left the current job early, and we do not want to lose the retention bonus and severance pay.
Risky idea in my opinion. This is not a good time to take a vacation. By far the safest thing would be to work to the separation date. They will pay your spouse for the vacation hours and he/she can go to work for the new employer the next day as agreed. I would not risk the retention bonus and severance pay trying to squeeze in a vacation.

I'm not understanding your motive for this. As I read your post you don't really want a vacation but are just trying to get working at the new employer a month sooner then the separation date. Why?
JW

harrylime
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Post by harrylime » Mon Sep 06, 2010 6:23 pm

kenbrumy wrote:
It was in the OP post. It's also Federal law. Vacation time is "earned" so she'll get paid for it Sick pay isn't so if his wife has any it's a use it or lose it proposition unless the employer has a separate policy.
It's my recollection that federal law is silent on the matter of payout of vacation upon termination and it depends upon state law.

JW-Retired
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Post by JW-Retired » Mon Sep 06, 2010 8:01 pm

This site speaks of vacation payout law in various states.

http://www.humanresourceblog.com/2010/0 ... rmination/

JW

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dm200
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Post by dm200 » Tue Sep 07, 2010 7:52 am

An example of how employees must be very careful, and not "assume" anything when leaving an employer was the experience of several former co-workers at a former employer a few years ago. This was a very large US Corporation.

In my experience, it is almost always the case that if an employee gives two weeks notice of leaving, and if the employer decides to accept the resignation immediately (and walk you out the door), that the employer will pay the employee for the 2 weeks (plus whatever other money is owed). This is so common that most employees in my field believe it is the law or a regulation. Not so.

At this former employer, when an employee would give 2 weeks notice, and if the employer decided to walk the employee out the door, that day was the last day of pay. They did not pay the two weeks. In several cases, that came as a big shock to folks who left. So, when word got around about this policy, smart employees made sure they could deal with the possibility/probability of the day of notice being the last day on the job.

xerty24
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Post by xerty24 » Tue Sep 07, 2010 8:03 am

Vacation time not taken can be lost. Whether or not your employer must pay you for this if you leave depends on your state. In CA, you must be paid. In NY, they can stiff you out of unpaid time. Check your state rules.

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CassiusKing
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Post by CassiusKing » Tue Sep 07, 2010 8:46 am

xerty24 wrote:Vacation time not taken can be lost. Whether or not your employer must pay you for this if you leave depends on your state. In CA, you must be paid. In NY, they can stiff you out of unpaid time. Check your state rules.
And it's taxed as "supplemental income" not straight payroll tax. Which on average is 25%, then your ordinary taxes.

I'm dealing with nearly the same situation you are right now.

"The Gub'ment do take a big bite don't she!" :lol
"Who cares how time advances? I'm drinking ale today." -Edgar Allan Poe

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dm200
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Post by dm200 » Tue Sep 07, 2010 11:41 am

CassiusKing wrote:
xerty24 wrote:Vacation time not taken can be lost. Whether or not your employer must pay you for this if you leave depends on your state. In CA, you must be paid. In NY, they can stiff you out of unpaid time. Check your state rules.
And it's taxed as "supplemental income" not straight payroll tax. Which on average is 25%, then your ordinary taxes.

I'm dealing with nearly the same situation you are right now.

"The Gub'ment do take a big bite don't she!" :lol
No, it is "taxed" the same way (as far as I know). Cite a source, if you believe it is "taxed" differently. What you might mean is that the "withholding" is (or may be) different. "Taxed" and "withheld" are two very, very different ssues - often confused by those who do not understand the differences.

firewynd
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Post by firewynd » Tue Sep 07, 2010 11:53 am

Twice I've left a job with significant accrued vacation time and they paid it out and it was taxed as ordinary income (IE same as all my income before - so nothing weird).

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dm200
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Post by dm200 » Tue Sep 07, 2010 1:59 pm

I have left many jobs over the years - all with accrued, but untaken vacation time. I was paid for this every time. It has been a few years, but I even think I was paid for unused leave when I got out of the military (up to 30 days - lost a few days over the 30).

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