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There's No Statute Requiring Severance Pay for Layoffs

Q & A

April 21, 1996

Q I have been working for my company for over four years. This week the company laid me off with no advance notice and no severance pay.

According to the company personnel policy manual, two weeks notice is expected from employees before resigning. It also says for layoff matters, any advance notice will be related to the business conditions requiring the layoff. Is it legal for the company to lay me off without giving me two weeks' notice or severance pay?

--D.G., Irvine


A Assuming that your termination was not part of a mass layoff that would require special notice under the Worker Adjustment, Retraining and Notification Act, there is no statutory requirement that an employer provide an employee who is being laid off with either two weeks' notice or severance pay.

You were correct, however, in reviewing the personnel manual to see whether the company had promised notice or severance pay to employees who are laid off. If the manual had contained a direct promise of severance pay or notice, you may have had an argument that your employer had a contractual obligation to provide you with one or the other. From the language you described in the company manual, however, it seems that the employer has not made any clear promise of severance pay or notice.

Also, while the company "expects" two weeks' notice from resigning employees, the company cannot actually enforce its request that employees give such notice before resigning.


employment law attorney

Morrison & Foerster

State Makes Call on Unemployment

Q My company's policy stipulates that married couples may not work for the company if they are in a supervisory-subordinate relationship. The policy states that the company will try to find another position for one of the workers, but if no positions are available, one of the spouses must quit.

Is the person leaving the company eligible for unemployment? If the company denies the person's unemployment claim, would he or she have a good chance to receive unemployment upon appeal? Does the couple have any other recourse?

--T.P. San Bernardino


A Technically speaking this is a voluntary resignation. However, some might argue that it could be interpreted as a discharge. As always in the case of a voluntary departure, the person who quits his or her job must show it was for a "compelling" reason in order to receive unemployment benefits. Quitting to protect the job of one's spouse might be compelling under certain circumstances.

The company has no authority to deny benefits, only the right to submit eligibility information to the state. Only the state can decide who does and does not get benefits. Whenever there is a discharge or a voluntary resignation the state investigates the separation to determine if the person meets the legal test for benefits. They must do this even if the employer does not submit a written protest.

If benefits are denied, the departing employee can appeal the decision and a hearing will be held before an administrative law judge. This is a separate agency, but bound by the same law. Frequently the state's decision will be overturned because different facts are developed at the hearing or because of a different interpretation of the law.


senior staff consultant

The Employers Group

Questioning Interviewer's Queries

Q I have been out of work for the first time in a while. In doing interviews with three companies (all in real estate), I was asked to fill out an application asking for a Social Security number, driver's license number, date of birth and when I graduated from high school. When I chose not to give them the date of birth, they took copies of my driver's license and Social Security card. It was my understanding that this information was given after employment.

I'm over 40 years old and I find this could be discrimination against my age. I didn't get the job at any of these companies.

--L.F., Mission Viejo


A The information that you say was asked of you is normally only sought after an employment offer is extended. However, it is not necessarily illegal to ask for the information prior to employment, as long as the employment decision is not based on the fact that you are over 40.

The prospective employers may have asked for the information merely to ensure that you are legally entitled to work or for some other legitimate purpose. On the other hand, it is difficult to fathom why the date of your graduation from high school would be asked.


employment law attorney

Paul, Hastings, Janofsky & Walker

The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice. If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626; dictate it to (714) 966-7873; or e-mail it to Include your initials and hometown.

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