No Perks if Worker Leaves Before Layoffs

by Don D. Sessions
Employee Rights Attorney
Mission Viejo, California

Originally Published in The Orange County Register, October 20, 2003

Q: After my employer announced it would soon close, I resigned to start my own company. The firm did not close after all. Others, who were laid off, got their unused vacation pay and are receiving unemployment benefits. Am I entitled to severance, unused vacation pay and unemployment benefits?

A: "There is no legal requirement that a company pay severance to employees who leave," says employee rights attorney Don D. Sessions of Don D. Sessions Law Corp., Mission Viejo. "If the company had its own contractual commitment to pay severance, it would be a different matter. However, that normally applies when the company lays off employees, not when they voluntarily resign, as you did.

"Also, I did not note from your question that the company was even giving severance pay to employees who were actually laid off. In any event, certainly you would not deserve better than they. Also, just because they got severance pay does not mean you deserve it, too.

"You certainly should have been paid for your unused vacation time upon your resignation. If the employer failed to pay you for this time, it may be subject to penalties in an amount equal to 30 workdays of your compensation.

"It does not appear that you would qualify for unemployment benefits because you prematurely resigned your employment, rather than waiting to be laid off. Even if you had been laid off, there is still doubt as to whether you would qualify because you chose to start your own business without income to you, rather than look for a job that would give you income. To qualify for unemployment compensation, you must show you are actively seeking a job."

For questions, call (800) 774-7494 or access job-law.com. © Sessions & Kimball LLP.