Severance Agreements

Web Admin - Tuesday, January 12, 2016

severance agreements, Illinois employment law attorneyIndividuals who are facing termination from employment may be offered a severance package. The terms of this package are contained within a severance agreement. Employees facing termination should pay careful attention to the terms placed within the agreement and be sure that they understand what the terms mean before signing. 

Provisions in Severance Agreements

Severance agreements are important to employers and employees. For employers, they provide protection against the employee filing a lawsuit against the employer in the future. For employees, the agreement describes what payment and benefits they will receive. Additionally, provisions can be included to protect against what will be said to future prospective employers about the reasons for the termination. The following are several of the most common issues that are addressed in severance agreements: 

- Severance Pay: Payment for the termination is usually offered in some term of weeks (for example, five weeks of pay). It is common for the offer to be based on the length of employment, such as one week of pay for each year of employment.

- Vacation Pay: Employees are entitled to payment for earned, but unused vacation time.

- Non-compete Agreement: If the employer and employee entered into a non-compete agreement, the employer should provide a copy of it to the employee and remind him or her of the terms and conditions. Additionally, changes to the non-compete can be made during severance negotiations and placed in the agreement.

- Returning Equipment: A discussion of what happens to any property of the employer (such as a company phone, laptop, or keycards) that is in the possession of the employee should be included in the agreement. This provision should explain how and by what date the property must be returned.

- Future Jobs: For the terminated employee, it is likely that he or she will be searching for a new job. In that case, it is important for the employee and his or her former employer to agree on how the employer will communicate with prospective employers. If the employee and employer give different reasons for the termination, it can be detrimental in the search for a new job. Additionally, the parties may enter into a non-disparagement clause, which states that neither of them will make disparaging remarks about the other to third parties. A non-disparagement clause should specifically define what cannot be said.

- Claims Waived: This is often the most important provision for employers. Under this provision, the employee relinquishes any right to file a lawsuit against the employer. It should define all of the types of claims and lawsuits that are barred.

- Employees Over 40 Years Old: These types of employees are protected by the Older Workers Benefit Protection Act (OWBPA). Workers 40 years of age and older must be given 21 days to review the severance agreement prior to signing it. Further, they have seven days after signing the agreement to change their mind and revoke it. 

Helping Employees 

If you are faced with a severance agreement negotiation, you should contact a skilled Illinois employment law attorney as soon as possible. Our team can help you understand the provisions in severance agreements, which can help you secure benefits and protect your rights. We proudly represent individuals the communities of Crystal Lake, Schaumburg, Palatine, Des Plaines, Rolling Meadows, Buffalo Grove, Barrington, Arlington Heights, Inverness, and Deer Park. We look forward to hearing from you. 

      Ken Apicella

      About the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.

Source: http://www.eeoc.gov/eeoc/history/35th/thelaw/owbpa.html

Misclassification of Employees

Web Admin - Thursday, November 19, 2015

    misclassification of employees, Illinois employment law attorneyIndividuals who are performing work for a business entity are generally either classified as independent contractors or employees. The difference between the two classifications is important; being considered an employee entitles individuals to greater benefits than independent contractors receive. Unfortunately, whether intentionally or not, the misclassification of employees occurs, and can end up costing employees access to significant benefits. 

    Classifying Workers 

    An independent contractor provides a good or service while retaining control over how that good or service is provided or performed. Moreover, an independent contractor will often treat the entity that he or she provides the work for more like a customer or client, rather than an employer. Frequently, an independent contractor will be performing similar work for multiple entities. 

    If a person performing work is considered an independent contractor, the business entity can avoid providing the person with the benefits that employees are entitled to. Some of these benefits include workers’ compensation, overtime pay, insurance, minimum wage, and family or medical leave. By avoiding these benefits, the entity can enjoy significant cost savings, which can create a competitive advantage over similar businesses. However, this comes at the expense of the individuals the entity employs. 

    Under the Illinois Unemployment Insurance Act, a presumption of employment exists that must be rebutted by the entity in order to lawfully classify the individual performing work as an independent contractor. Specifically, an individual performing services for a business entity is considered an employee unless it is proven that:

    1. The individual is free from the entity’s control or direction over the performance of the work, both under the terms of the contract and in fact;

    2. The service provided is outside of the normal course of the business or is completely performed outside of all of the places of business of the entity; and

    3. The individual is part of an independently created trade, occupation, profession or business. 

    Under the Illinois Employee Classification Act, a construction worker is considered an independent contractor if the above test is met or if the worker is a sole proprietor or partnership. 

    Holding Employers Liable 

    The Illinois Department of Labor, as well as various other government agencies, is responsible for enforcing state laws that govern employee misclassification. Consequences for misclassifying employees as independent contractors include the assessment of interest on late or delinquent unemployment insurance trust contributions and financial penalties. An employer that does not obtain workers’ compensation insurance can be fined up to $500 for every day that it is non-compliant, with a minimum fine of $10,000. It is also possible for an individual to file a personal lawsuit against his or her employer to recover damages such as wages, back overtime pay, or other lost benefits. 

    If you believe that you have been misclassified as an independent contractor, it is important to contact an experienced Illinois employment law attorney as soon as possible. There are potentially significant benefits that you have been denied as a result of that misclassification. Our firm proudly helps individuals in communities throughout the northwest suburbs, including Crystal Lake, Schaumburg, Palatine, Des Plaines, Rolling Meadows, Deer Park, Inverness, Arlington Heights, Barrington, and Buffalo Grove. 

      Ken Apicella

      About the Author: Attorney Ken Apicella is a founding partner of DGAA focusing in the areas of personal injury, employment, insurance coverage disputes, and civil litigation. Ken earned his J.D. from DePaul University College of Law in 1999. He has been named a SuperLawyers Rising Star and a Forty Illinois Attorneys Under Forty to Watch. Ken has written and lectured for the Illinois Institute for Continuing Legal Education and regularly serves as a moderator at Northwest Suburban Bar Association's Continuing Legal Education seminars.




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