Fired Employee Entitled To Overtime Pay
If you’ve been fired and receive severance pay, can you still get paid for back wages?
Three judges in a Mississippi wage and hour case concluded “yes.” Why? Because severance is not the same as wages. Severance is pay given to an employee that is fired and is considered “additional pay” on top of wages. In a Mississippi case, a woman – Karen Martin - was fired from her job with PepsiAmerica and was offered a severance package with benefits. The package came with a hitch – in order to get severance pay, Martin had to agree not to sue the company based on its firing her or any other actions that occurred during her employment. Martin agreed and received the severance money.
After later finding out that Pepsi owed her back wages under Federal labor law for overtime hours, Martin sued Pepsi. Pepsi then sued back, arguing that any overtime pay Martin received should be reduced by the amount of severance they paid her. The New Orleans court disagreed, stating that severance is completely separate from wages.
The court said, “the money and benefits Pepsi paid to Martin were not wage payments … they were not related to her labor at all.” Although the court noted that Martin may have breached her agreement not to sue the company that was a separate issue. Pepsi owed Martin back wages and couldn’t shirk its duty to pay.
The bottom line – if you are fired and receive severance pay, you may still be able sue and receive back wages for any hours worked, including overtime.
For more information, or if you believe you have not received all the pay you are entitled to, contact the experienced Georgia employment lawyers at Buckley & Klein, LLP, an Atlanta employment law firm dedicated to protecting worker’s rights.
