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Tina
Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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We presently have 2 employees that work part-time remotely,

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We presently have 2 employees that work part-time remotely, $10/hour. We are seriously considering outsourcing our work to a few virtual assistants. These employees have performed well, but we have decided to take a different direction. We have some ideas for a severance package but want to make sure that we do this right legally. Any ideas or guidance would be appreciated. Thank you.
Hello and welcome,

Do you have a severance policy in place?

Customer: replied 5 years ago.

No. We have been in business for 3 years and have had these two employees for about 18 months. We are a typical small business, hired people but don't have much in the way of formal prodcess around HR issues.

 

I feel an emotional commitment to these two employees and would want the separation to be as graceful as possible. I have told them in the past they would always be a part of the company and now I regret making those statements. At the time I said them I meant it, but our thinking has changed.

I see.

It is best to obtain a release of claims in return for any severance you decide to pay them. One month of salary is typically satisfactory as they would normally be eligible for unemployment benefits since they are being terminated without good cause.

A release of claims would typically protect you from lawsuit for discrimination or retaliation, which does not appear to be your motive anyway.

It is important to remember that what you agree to pay these employees can set a precident for the future termination of employees since you do not have a policy in place, such that future employees may attempt to demand the same amount of severance arguing that you established a policy through your conduct.

Here is a summary with regard to drafting a release of claims. It is best to retain an attorney to draft the document for you though.

http://www.schnader.com/files/Publication/5b911653-6490-4881-b0b3-21b062c548a7/Presentation/PublicationAttachment/8fcb1e33-8e6f-4288-a403-2cbfd566d072/July%202011_Employment%20Claims%20in%20Release%20Agreements%20California.pdf

You must also offer COBRA insurance for the employees at their expense typically, if you provide health benefits.

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