I recently became aware that the Pennsylvania Department of Labor is taking the position that retention bonuses are the same as severance for unemployment purposes. This is affecting the rights of hundreds of displaced Pennsylvania workers, who are being denied unemployment benefits.
I have seen an internal memo from the Department of Labor addressing this issue. It reads in pertinent part as follows (ALL CAPS in original):
|Retention Bonus Paid |
When You Are Asked to Stay
Contrary to what the DOL's internal memo says, retention bonuses are not paid because a business is closing. They are paid to keep an employee working UNTIL a business closes.
Retention bonuses are paid to encourage people employed by companies that have been sold ("Company Sold") to another company ("Buying Company") to remain in the employ of Company Sold for a period of months, after which they will be laid off when Buying Company assumes control of Company Sold.
Usually, in addition to a retention bonus, the to-be-displaced employees are also paid a severance when the change in control occurs.
|Severance Paid |
When You Are Told to Leave
|Dead Wrong on This One|
If you appeal such a determination by the Department of Labor's Service Center, and prepare properly for the ensuing Referee Hearing, you can win this case (even if you have to subsequently appeal to the Board of Review).
This promises to be a contentious legal issue, as the Department of Labor has been, and remains, dead serious about maximizing the applicability of the 2012 severance amendment in order to preserve unemployment fund assets. Since it it involves a somewhat tricky legal analysis, and will likely lead to appeals, you may want to consider counsel for your Referee Hearing is this situation arises in your life.
|Helping Pennsylvania Workers Since 1991|
Philadelphia Area Employment Attorney Representing Employees
John A. Gallagher is an employment lawyer who represents employees in Pennsylvania.
John typically represents workers who need an employment lawyer in Philadelphia County, Chester County, Delaware County, Bucks County, Berks County, Lancaster County and Montgomery County.
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