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Mass Layoffs and Severance Pay Wisconsin

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  • Mass Layoffs and Severance Pay Wisconsin

    The company I work for is in the process of doing mass layoffs and are offering a severance package. From what I understand in Wi. they do not have to offer severance. Unless the layoff / termination falls under the WARN Act. Which my situation falls under. Then it is 60 days notice with pay. Correct me if I am interpreting it wrong. My question is how is the severance $ figure determined? I am in sales, we work on straight commision, and the average sales person makes anywhere from $120,000 to $160,000 + a year.
    So you can imagine my disgust when I heard the severance offer is minimum wage (I think is $6.55 to $7.00 per hour) 40 hours per week, for 60 days. When following the WARN guidelines is that legal? I have searched and can not find anything that details that info. Talk about a kick in the teeth!
    Thanks in advance for your help!

  • #2
    Severance is not required under WARN. IF the employer gives less than 60 days notice, then pay in lieu of notice is required, but if the full 60 days is given, WARN does not require that any severance be provided. Additionally, there are exceptions to WARN under which the employer can give less than 60 days notice without being required to offer pay. We would have no way of knowing whether any of the exceptions exist.

    One of the payroll people will have to address the issue of commissions.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


    • #3
      If it were me, I would use whatever rate of pay used when, for example, you take a paid vacation day. How a day of pay is calculated for exempt outside salespersons is isn't an issue addressed by law, since there is no salary requirement for such employees; for nonexempt employees, I would follow the method noted in the preceding sentence.

      However, be aware that this is what I would recommend/do as a Payroll Manager. I'm not aware of anything in the WARN Act that goes as far as to specify how the calculation must be done.

      Also, just to be clear, if the payment is truly severance pay (and not pay in lieu of notice because the 60 days was not met), the law doesn't require it at all, as cbg noted.
      Last edited by Pattymd; 12-29-2008, 05:48 AM.
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