Although severance pay is not legally mandated in Illinois, many employers will give you severance. If, however, there was a provision for severance in your contract or in a company-issued employee handbook, the company must follow those provisions. A Chicago severance benefits attorney can help you determine what you might be entitled to receive.
No law requires Illinois employers to pay severance pay. If you have one, there may be a provision for severance pay in your employment contract. Similarly, your company-issued employee handbook may include a section outlining the company’s severance pay practices. In 2012, an Illinois appellate court held that handbook provisions could be enforceable contract terms. Since then, employers tend to be careful to disclaim the contractual nature of their handbooks. Nonetheless, the court stated that certain handbook terms created an enforceable agreement between the employer and employee, an easier standard to prove than a contract.
Although Illinois does not mandate severance pay, many employers do provide it. Generally, the policy will require the payment of a specified number of weeks for each year of employment (e.g., one week for each year). One to two weeks is average, while four weeks per year is occasionally available. Thus, for example, if a terminated employee made $1,000 a week and was with the company for ten years, the total severance would be $10,000. Note that your severance pay is taxable income, whether paid as a lump sum or on your standard payroll schedule.
Some severance benefits other than compensation are mandatory. Your employer must, under a federal law called COBRA, offer you the opportunity to continue, at your own cost, your health insurance benefits. Even though this can be quite expensive, it may be your best option for insurance until you have another job and qualify for that employer’s health insurance program. Your Chicago severance benefits attorney can help you decide whether to take COBRA benefits or not. In addition, unless expressly denied under your employee handbook or contract, you must be paid any accrued vacation days and tuition reimbursements. Finally, your vested benefits in your employer’s retirement plan are yours and must be rolled over at your direction.
Illinois considers severance pay to be money you receive for your work during your employment. It is therefore not income for the purpose of unemployment compensation and should not affect any benefits to which you may be entitled.
Sometimes your employers may not be as helpful as you would like concerning the benefits you should receive after your employment is terminated. This hesitation is especially likely where severance pay is listed in an employee handbook, and your employer may wish to dispute it. In such a case, a Chicago severance benefits lawyer can be a tremendous help in getting you the benefits to which you are entitled. Contact Bartolic Law today or call to schedule an initial consultation about your case.