Offered consultant contract, can I lose severance payments?

Anonymous

December 8,2023 at 7:40PM UTC

Welcome to Fairygodboss!

We’re the largest online career community helping women achieve their career goals. Gain access to articles, jobs, events, and a supportive network of women and allies. Membership is free, always.

Offered consultant contract, can I lose severance payments? My previous company is supposed to pay me 12 weeks of severance and even though it's been over 13 weeks that I have been laid off there are still 3 remaining payment cycles due to the processing by payroll, x number of days after executing the separation agreement etc. In the contract it states that if I obtain new work by the same corporate parent, than my severance payments will cease. I have been offered a freelance position by a sister company where I used to work to be paid hourly for hours worked. If the contract is dated now but payment wouldn't begin until later this month or even next month, would my severance payments be in jeopardy? Don't want to lose my money!

Why women love us:

Daily articles on career topics
Jobs at companies dedicated to hiring more women
Advice and support from an authentic community
Events that help you level up in your career
Free membership, always

5 comments

Share your insight

Join an authentic community that helps women support each other at work. Share your professional experience or ask for advice — you can even post anonymously.

5 Comments

Join the conversation

AnonymousDecember 8,2023 at 8:07PM UTC
The best advice I can give you is to carefully check the wording on your severance agreement and double-check that with your state Department of Labor, as that is where the answers will lie. The severance agreement should stipulate what is considered part of "the same corporate parent," you should be able to discern from the language whether the contract signature date (as that is how it will be worded) or the date of starting billable hours is the cut-off. If unsure, and it makes a big difference, would delaying the signature/start date be an option?
AnonymousDecember 8,2023 at 9:00PM UTC
If the company you will be consulting for is in any way related to the company who is paying you Severance monies, the I would argue that yes, you will lose that remaining Severance if there is overlap of any kind.
AnonymousDecember 8,2023 at 11:03PM UTC
In high tech they keep someone fully employed for 1 month (to avoid warn act). If you start during that month of "still employed" then you need to pay back the package. After that, you are free to get new employment. They call it double dipping since you are getting paid by 2 companies while only working for one. I suggest you look at the severance agreement you signed to see if it is similar to to what I described or something else.
AnonymousDecember 12,2023 at 2:30PM UTC
Sounds like it
AnonymousDecember 12,2023 at 3:01PM UTC
Sounds like yes. To be safe, I agree with the other poster who recommended getting an LLC for your consulting business and then having your new LLC take the contract as 1099 or C2C.