What's happening
This bill limits severance pay for public at-will employees to three months' salary and excludes it from retirement calculations.
Why it matters
Caps severance payouts. for public at-will employees to a maximum of three months’ salary, which aims to prevent the use of large “golden parachute” agreements at public authorities and promote more responsible spending of taxpayer funds.
Clarifies what counts as severance. , ensuring that only specific, quantifiable payments upon termination are covered by the cap—while excluding accrued vacation, sick leave payouts, and continued insurance contributions, making the policy more targeted and fair.
Prevents “severance boosting” of pensions. by explicitly excluding severance pay from retirement calculations and deductions, closing a loophole that could artificially inflate pension benefits for departing employees.
Ensures beneficiaries are protected. , requiring that any undistributed severance owed to a deceased former employee is paid to their named beneficiary or estate, promoting fairness and reducing bureaucratic complications for families.
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Who cares
Headline styles
Limit Public Employee Severance
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
No co-sponsors yet.
History
- Signed chap.595
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading cal.489
- Substituted for A2480
- Referred to ways and means
- Delivered to assembly
- Passed senateVote 59–1
- Advanced to third reading
- 2nd report cal.
- 1st report cal.369
Show 1 earlier action
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Limit Severance for Public Employees
Assembly Floor Calendar · Sponsor Monica P. Wallace
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4292
2019-2020 Regular Sessions
IN SENATE
March 6, 2019
Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law, in relation to setting limits on severance packages for public at-will employees
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as the "severance pay limitation act".
§ 2. The public authorities law is amended by adding a new section 2854 to read as follows:
§ 2854. Severance packages. 1. For the purposes of this section:
(a) "at-will employee" shall mean an employee of any entity organized under this chapter. Any employee that is covered by a collective bargaining agreement or union contract shall not be considered an at-will employee for the purpose of this section.
(b) "severance pay for an at-will employee" shall include benefits or compensation with a quantifiable monetary value that are provided for an at-will employee upon termination of employment and shall not be considered part of the at-will employee's annual wages and benefits. "Severance pay for an at-will employee" shall not include payments for accumulated vacation, accumulated sick leave, and accumulated sick leave liquidated to cover the cost of group term insurance or payments of periodic contributions by an employer toward premiums for group insurance policies.
2. Notwithstanding any other law, rule or regulation to the contrary, severance pay provided for an at-will employee leaving employment shall not exceed an amount equivalent to their prior three months' salary.
3. Notwithstanding any other law, rule or regulation to the contrary, the severance pay for an at-will employee shall be excluded from retirement deductions and from any calculations of retirement benefits.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00384-01-9
S. 4292 2
4. If a retired or terminated at-will employee dies before all of their severance pay has been disbursed, the balance due must be paid to a named beneficiary or, lacking one, to the decedent's estate.
5. No collective bargaining agreement or union contract shall be altered by the provisions of this section.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public authorities law, in relation to setting limits on severance packages for public at-will employees
Purpose or general idea of bill
This bill limits severance pay clauses to three months' pay for at-will employees of public benefit authorities organized under the public authorities law.
Summary of specific provisions
Section 1 states the act shall be known as the severance pay limitation act.
Section 2 adds § 2854 under Article 9, Title 3 of the New York Public Benefit Authorities Law to define the term "at-will employee" and limit severance packages for at-will employees to no more than three months' pay. It further ensures that severance payments are not be considered in calculating retirement benefits and provides details on the distribution of severance benefits in the event the at-will employee dies prior to receiving any and all severance pay benefits.
Section 3 states the bill shall take effect immediately.
Justification
Recently, the Executive Director of the Erie County Water Authority renegotiated his contract to include a "golden parachute" (severance pay) clause that requires the Authority to pay him his full salary until the year 2020 if he is terminated without cause. The County Legislature modified the contract, just months before the political party control- ling the authority is set to change. As a result of this change, taxpay- ers stand to lose approximately $360,000 if he is replaced before the contract expires. Other individuals at the Authority have negotiated similar golden parachute contracts in the past.
While golden parachute clauses may be appropriate in the private sector, such clauses are inappropriate in the public sector where the taxpayers are footing the bill. This practice seeks to insulate political appoint- ees at the expense of taxpayers and is contrary to good government.
This bill would limit severance for at-will employees to three months' pay. Other states such as Minnesota and Utah have enacted similar meas- ures to curb abuses of political authority by placing reasonable limits on severance payouts.
Prior legislative history
2017-2018: A.10076 - Passed Assembly
Fiscal implications for state and local governments
To be determined.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.