What are employees' rights when a company closes down?

When a company closes down, an employee has contract rights, company policy rights, and statutory rights. Under these categories, employees have many rights when their company shuts down. First, let's look at the differences between these sets of rights:

• Contract rights

  These types of employee rights come from employee contracts. Employees covered by a collective bargaining agreement or union might receive protection from the specifics of employee contracts in the event they lose their job due to the closure of their company.

• Company policy

  Employees can also have rights outlined in company policies and specific regulations. Rights in this category might include severance pay, the extension of employee benefits programs, or the need for written notice of a company shutdown.

• Statutory rights

  Federal or state governments have instituted these rights on behalf of employees. These rights include items like unemployment benefits and government assistance in the event of a company shutdown.

  Here are some specific rights you might have when your company closes down:

  • A final paycheck

    You have the right to receive a final paycheck after your company shuts down. The timeline of this process is determined by your state government's policies and laws on the matter.

    The amount and length of time you receive this right varies, depending on your state and your specific company's policies.

    Many states force employers to include the following on your final paycheck:

    • Include all of your saved and unused vacation time

    • Include all of your sick days

    • Include all of your paid time off

Again, specific details depend on your state and your company's policies.