When you’re planning to terminate a New York employee’s job, you may wish to offer them a New York separation agreement. Separation agreements are a contract between employer and employee, which protect the employer from liability and provide employees some measure of stability after their departure. They typically include benefits for the employee like severance pay.
If you’re planning to use an employment separation agreement for a New York employee, it’s important that it complies with all applicable New York state and federal laws—even if your company is located elsewhere.
Here’s what you should know about New York separation agreements.
What is a NY employment separation agreement?
Employment separation agreements can be entered into when you terminate an employee. They’re a legally enforceable contract between the parties negotiated before separation.
Employers often use separation agreements when they’d like a terminated employee to agree to certain terms, such as non-disclosure or non-compete clauses, or to release them from liability under certain types of claims.
Because employment separation agreements ask an employee to waive specific rights, such as their right to pursue legal claims against the employer, there must be valuable consideration involved. For example, you might offer a significant severance payment in exchange for their agreement.
Benefits of using an New York employment release agreement
Separation agreements primarily protect the employer. For example, you might ask employees to waive their right to bring legal claims against the company, or sign a non-disclosure agreement to prevent them from divulging information about their severance after their employment ends.
Employees often agree to sign employment separation agreements in exchange for the benefits offered, such as a payment, a neutral reference agreement, or extended healthcare coverage. This can help ease the transition from one job to another, from setting expectations for the final weeks of work to financial security after employment ends.
Employment termination agreement sample
Keep in mind that both state and federal law place restrictions on severance agreements. For instance, the National Labor Relations Board recently restricted the use of non-disparagement and confidentiality agreements, but only if the employee was terminated for cause. Furthermore, New York state law requires employers to specifically list the types of claims the employee waives under both federal and state law. New York specifically limits claims releases to those under the New York State Human Rights Law, the equal pay provisions of New York Labor Law, New York’s leave laws, the Stop Hacks and Improve Electronic Data Security Act, the New York State Wage Theft Prevention Act, and New York’s minimum wage and overtime laws.
Furthermore, employees can only release claims that may have arisen before the effective date of the agreement. They cannot waive claims which may arise in the future.
This sample New York employment separation agreement is from the Association of Corporate Counsel. Note that the severance benefits include wage benefits as well as a COBRA subsidy, while the release of claims portion specifically lists all the types of claims to be waived—and which types are excluded. The agreement also includes a sample non-disparagement and confidentiality clause, which offer further protections for employers.
Since the link above is a sample agreement, it doesn’t cover every possible situation or dispute. Employers may add, subtract or rewrite clauses to make sure the agreement encompasses all necessary and/or desired issues. Finally, keep in mind that employees are free to reject the agreement or negotiate for better terms.
How to create a NY employment separation agreement
Now that you know the basics of New York employment separation agreements, you can start drafting your own. Avoid using online templates or copy-and-pasting other separation agreements for your own use. There’s no guarantee that those options will meet all state and federal employment law requirements, which leaves your organization open to significant risk.
Hiring an attorney is one way to ensure compliance, but that can be time-consuming and expensive—and unless you’re an employment law attorney yourself, most people don’t feel comfortable drafting their own agreements with so much at stake.
SixFifty helps employers preserve their peace of mind while saving time and money. Our Employment Docs platform allows you to generate top-tier New York employment separation agreements which comply with the latest employment laws. Best of all, our legal experts keep an eye on employment legislation nationwide. You can rest assured that every time you generate an employment separation agreement, it will be current and compliant, no matter how the law might change.
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