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Termination questions re severance - TX

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  • Termination questions re severance - TX

    I was just laid off last Friday and have some questions about the severance package my former employer gave me.

    They paid me 2 weeks salary in lieu of notice, accrued vacation, and 5 weeks of severance pay.

    My question is: can I fight to get my annual bonus and 401K match contributions?

    So far they have told me that since the company policy for bonuses is that you must be employed in February when the bonus is distributed they will not pay me. They also said company policy for 401K distribution is that you must be employed on 12/31 in order to receive the match distribution.

    I feel that since I've worked hard the entire year except for the last month it's only fair that they compensate me with a prorated bonus and 401K match.

    Any thoughts or suggestions are appreciated. Thanks

  • #2
    In Texas, as in most states, bonus plans may be structured without legal limitations. So, if the bonus agreement says you must be employed when the bonus is actually paid, then that's the agreement. Although a few states deem earned bonuses/commissions as vested wages, Texas does not, to my knowledge.

    Regarding the 401(k) plan, the rules in the plan document must be adhered to, or the plan runs the risk of being disqualified, and all contributions becoming taxable. If the plan document contains these rules, then, it is what it is.

    You may think this unfair, and you may be right. However, based on the details in your post, I see nothing illegal.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      Although a few states deem earned bonuses/commissions as vested wages, Texas does not, to my knowledge.
      - Correct. Nice work, Patty.

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