Are Employers Required to Offer Severance Pay in Florida?
If you are an employer in Florida, you will be faced with the uncomfortable task of terminating an employee at some point in time. And, you may be unsure whether you are required to offer that employee any type of severance package.
Florida does not have any laws requiring a company to offer someone a severance agreement and employees are not legally required to sign one if one is presented. However, if there is an employment agreement in place that includes a severance package, then both parties can be held to the terms of earlier contracts.
Why Employers Offer Severance?
It’s not uncommon for executive employment contracts to include a severance package to entice top-tier candidates. The idea behind a severance package is to help ease the pain of termination and help reduce the risk of potential litigation. This can help fill the gap in earnings for a worker who needs to find a new job. There is no set guideline on how much to offer, but some companies give two weeks salary and an extra week for every year the person was employed at your business.
What Employers Can Seek from Employees
When offering a severance package to an employee, it’s not uncommon to ask the employee for a number of things in return. Non-compete restrictions and confidentiality clauses are two of the common terms in a severance agreement. Drafting confidentiality and non-compete clauses need to be drafted with caution, and it’s recommended that you use an attorney who is familiar with these agreements. If the clauses are too broad or too restrictive, they may not hold up in court. A judge could throw out a portion of the agreement or the entire contract.
For example, if you terminate someone in the restaurant industry, you cannot ask him or her not to work at another restaurant in the entire state for 10 years. If your restaurant is a high-end specialty Vietnamese restaurant, it’s more reasonable to include a non-compete clause that says the employee cannot work at another Vietnamese restaurant in the same city for up to two years. Anything over two years is usually frowned upon by most courts. The employer must also show it has a legitimate business reason for enforcing the non-compete, such as the employee had access to confidential information, or the company spent a sizeable amount of money training the employee.
Almost all severance agreements include a release of all claims, including future claims. This is another reason why using an attorney to draft your agreement is so important. The agreement has to be carefully presented to the employee. If the employee hadn’t thought about filing a claim but you make that a large part of the agreement, they may start wondering what you may be hiding, or they may become concerned about and it could give rise to them speaking with an attorney to see if they have a valid claim against you.
Retaining a Florida Employment Law Attorney
As an employer, you are expected to know all the federal and state laws that apply to employment in Florida. This can be overwhelming at times since the laws are complex and ever changing. This is one reason why having a West Palm Beach employment and labor law attorney on retainer can be helpful. If you have questions about severance benefits or other aspects of Florida employment and labor law, contact the skilled team of attorneys at Pincus & Currier LLP at 561-868-1340 to schedule a consultation.