BuzzFeed, a VC-backed news and entertainment website, recently announced it was laying off 15 percent of its workforce, or roughly 200 people.
BuzzFeed’s head of HR, Lenke Taylor noted that the company is giving all laid-off employees severance packages of a minimum 10 weeks pay.
Unfortunately, those employees who only get 10 weeks of severance pay are getting shortchanged by 20 days minimum. Let me explain.
Whenever there are impending mass layoffs with companies with over 50-100 employees, companies must file a WARN notification with the state.
A company doing a mass layoff must then pay the state’s required Worker Adjustment and Retraining Notification (WARN) Act pay.
The WARN Act of 1988 is a US labor law which generally provides 60 calendar-day advance notification of plant closings and mass layoffs of employees.
But in New York State, where BuzzFeed is headquartered, the WARN Act applies to private businesses with 50 or more full-time workers and requires companies to pay 90 days of WARN Act pay.
If you are a NYC worker getting 10 weeks of “severance,” that equals 70 days of pay. 90 days – 70 days = 20 missing WARN Act paydays. Yet so far, I’ve heard nobody fight for these missing days because few know the rules.
When an employee is laid off, generally what happens is that he or she doesn’t have to come back to the office again. The employee proceeds to receive his or her WARN Act pay based on a normal payroll schedule for the duration of the WARN Act pay.
A Severance Is Separate From WARN Act Pay
Besides some not getting their full WARN Act pay, I’m guessing most BuzzFeed employees are actually not getting any severance at all.
WARN Act pay is required by law during a mass layoff. On the other hand, a severance payment is given on top of WARN Act pay.
A severance is completely discretionary by the employer.
Sadly, many uninformed employees who get laid off confuse their WARN Act pay with severance. This is why you hear so many employees say they received 1-3 months worth of severance even if they’ve been at their employer for 10 years.
Not coincidentally, WARN Act pay ranges from 1-3 months, depending on your state. Always look up your state’s specific labor rules.
What I teach in my book, How To Engineer Your Layoff, is how to negotiate a severance on top of WARN Act pay. The more knowledge I can provide, the lower the chance of an employee getting hoodwinked.
Besides confusing a discretionary severance with WARN Act pay, what’s also interesting is that all the laid-off employees, except for those in California were informed they would not get their Paid Time Off (vacation days) as part of their severance.
This nonpayment of PTO days caused a huge uproar because it is customary at BuzzFeed and many firms across America for employees not to take vacation days due to the pressures of work.
This is a sad cultural phenomenon that is quite different than every other part of the world.
Here is the grievance letter the BuzzFeed News Staff Council published on Medium to pressure management to pay its laid-off workers all their unused PTO.
To Jonah Peretti, Lenke Taylor, and Ben Smith:
We are the BuzzFeed News Staff Council, a group of employees appointed to open up the lines of communication between News employees and company management. We have urgent concerns about the sweeping layoffs hitting the whole company — not just News. This letter is cosigned by current and laid-off staffers from across BuzzFeed who strongly share this concern.
Every aspect of the way that these layoffs have been handled so far — from communication to execution to aftermath — has been deeply upsetting and disturbing, and it will take a long time to repair the damage that has been done to our trust in this company. But there’s one thing you can do right now to help the employees who are losing their jobs.
BuzzFeed is refusing to pay out earned, accrued, and vested paid time off for almost all US employees who have been laid off. They will only pay out PTO to employees in California, where the law requires it. We understand that in other states where BuzzFeed employees have been laid off, state law does not require you to do so. But employers absolutely can pay out PTO — and often do. It is a choice, and for a company that has always prided itself on treating its employees well, we unequivocally believe it is the only justifiable choice.
This is paid time that employees accrued by choosing not to take vacation days, and instead do their work at BuzzFeed. Many of the employees who have been laid off had the most difficult jobs in terms of scheduling — such as the breaking and curation teams on BuzzFeed News who regularly worked weekends and holidays, or managers who weren’t able to use vacation time because they were expected to be available to their teams. They saved up those days (or weeks) because they were so dedicated to their work, and, in some cases, felt actively discouraged from taking time off. They have as much of a right to those days as anyone else.
For many people, paying out PTO will be the difference between whether or not bills and student loans will be paid on time and how their families are supported. It is unconscionable that BuzzFeed could justify doing so for some employees and not others in order to serve the company’s bottom line.
We, the undersigned, stand together in demanding that BuzzFeed pay out earned PTO to all laid-off employees, regardless of the state they live in, to eliminate this disparity. It is the only just way to proceed — especially as this round of layoffs has been so damaging to your workforce as a whole — to pay your employees for the time they earned while working so hard to make BuzzFeed a successful company.
The BuzzFeed News Staff Council, alongside current and laid-off BuzzFeed employees (600+ have signed).
Think what you want about BuzzFeed’s quality of reporting; these 200 laid-off employees are getting screwed by not getting their PTO either.
One day of PTO equals one day of pay. Some of these employees have accumulated over a month of PTO. To lose this money is a big blow.
In the end, BuzzFeed ended up relenting to pressure and announced they will pay for all accumulated PTO. If they didn’t pay, they might have faced a readership boycott or experienced a further exodus of employees. Below is their follow up.
UPDATE: After meeting with the BuzzFeed News Staff Council on Monday afternoon, Jonah Peretti announced in a company-wide email that BuzzFeed will pay out earned and unused PTO to our US colleagues who were laid off this week, regardless of which state they live in.
Thank you, thank you, thank you to the nearly 600 BuzzFeed employees who signed this letter and stood in solidarity. Your support made this happen.
Using PTO And Negotiating A Severance
My general advice is to take sick days instead of PTO if you plan to be out of the office a short while before negotiating a severance. Everybody needs to take care of their mental health.
PTO days have value that should be paid to you upon departure.
One of the mistakes I made during my severance negotiation process in 2012 was using five vacation days to go to Hawaii two months before I negotiated my severance. As a result, I lost five days worth of salary in my severance package.
Every year, for each of the 11 years I was at my firm, I earned seven sick days a year to use. Out of the 77 eligible sick days I accumulated, I used maybe 15.
As a result, my firm gained 62 days worth of my services for free.
Everyone needs to know how many sick days they get a year and use them. After you have exhausted all your sick days, then start using your PTO credits.
I have quietly consulted with over 60 individuals around the country on how to negotiate their respective severance since 2012. In not a single instance has a company not paid its employee for unused PTO.
If, during your severance negotiation discussions, you feel your company will not pay for your unused PTO, then, by all means, start rapidly taking all your vacation days during the negotiation process.
A successful severance negotiation on average takes between 45 – 90 days. Therefore, negotiators should have more than enough time to use their PTO. Further, you disappearing for weeks may actually give you more leverage in your severance negotiation.
I’ve rarely seen anybody accumulate more than 60 days worth of PTO because companies generally have a 30 day carryover limit.
There are so many nuances to severance negotiations. If you feel you’re on unstable ground or want to leave your job, I recommend you read my book and all my severance-related articles.
Workers every day are getting shortchanged. If the average BuzzFeed worker in New York gets paid $80,000, losing three weeks of WARN Act Pay is equivalent to losing $4,615.
But the reality is, employees are missing out on much more in remuneration because they don’t know the rules and are too afraid to fight for themselves.
The more you know the rules and understand various case studies, the better prepared you will be.
Leaving my job with at least five years worth of living expenses made all the difference in the world for my financial peace of mind.
Remember. Every time a valuable employee quits instead of negotiates a severance, a baby panda dies in the woods. Fight for your rights. Don’t be ignorant. Love our baby pandas.