[US] $500m severance pay owed to former Twitter staff

A former Twitter HR boss has accused the social media giant of failing to pay ex-employees around $500m (£385m) in severance pay, BBC News reports.

Courtney McMillian - Twitter’s former "head of total rewards" - made the claim in a class-action lawsuit. The complaint alleges that Twitter’s new owner Elon Musk was aware of the severance plan before he sacked thousands of staff. 

However, it reportedly says that he baulked at the “expense”.

The class action is among the latest in a string of lawsuits filed against Twitter (currently known as X Corp. following an unpopular move to rebrand) in relation to the mass layoffs that followed Mr Musk's purchase of Twitter for $44bn (£34bn) in 2022.

According to the lawsuit, the layoffs ultimately affected around 6,000 people.

The complaint - filed in federal court in San Francisco - stated that staff were due to receive a minimum of two months' base salary, under Twitter’s severance plan, together with a cash contribution toward health insurance, among other benefits.

Staff with more senior roles, including Ms McMillian, were reportedly due six months of base salary in severance pay, plus one week for each full year of experience, the lawsuit said.

Instead, staff received “at most” three months of pay after they were sacked. The total included one month of severance, as well as two months' worth of pay to comply with a US law aimed at providing workers with notice of firings, according to the complaint.

It says this was a “fraction” of the $500m to which employees were entitled.

This didn't go unnoticed in the payroll industry. In a recent post, Papaya Global CEO, Eynat Guez, referenced Scruples, the moral dilemma game, writing, “In Payroll, you can run the red light - skip on payments or misclassify employees - but you run a huge risk. It's not a question of if you get caught, it's a question of when. And when you are caught, the question becomes about severity of the penalties.”

She continued, “But for me, it was never a question of consequences. It's a question of scruples. You do Payroll right because it's the right thing to do. You don't take shortcuts. You don't round corners. You don't run the red light. People work, they deserve to get paid. There is no dilemma.”

Twitter no longer has a public relations department and the company did not release a comment.

In November, after a round of mass layoffs, Mr Musk stated that staff would receive three months' worth of pay, “50% more than legally required”.

In the complaint Mr Musk was accused of misleading employees about whether Twitter would honour the plan, reportedly leading some to stay longer at the company than they would have otherwise.

"Musk initially represented to employees that under his leadership Twitter would continue to abide by the severance plan," Kate Mueting - the lawyer representing Ms McMillian - said.

"He apparently made these promises knowing that they were necessary to prevent mass resignations that would have threatened the viability of the merger and the vitality of Twitter itself."

Source: BBC News

(Quotes via original reporting)

(Ms Guez’s quote via LinkedIn)

A former Twitter HR boss has accused the social media giant of failing to pay ex-employees around $500m (£385m) in severance pay, BBC News reports.

Courtney McMillian - Twitter’s former "head of total rewards" - made the claim in a class-action lawsuit. The complaint alleges that Twitter’s new owner Elon Musk was aware of the severance plan before he sacked thousands of staff. 

However, it reportedly says that he baulked at the “expense”.

The class action is among the latest in a string of lawsuits filed against Twitter (currently known as X Corp. following an unpopular move to rebrand) in relation to the mass layoffs that followed Mr Musk's purchase of Twitter for $44bn (£34bn) in 2022.

According to the lawsuit, the layoffs ultimately affected around 6,000 people.

The complaint - filed in federal court in San Francisco - stated that staff were due to receive a minimum of two months' base salary, under Twitter’s severance plan, together with a cash contribution toward health insurance, among other benefits.

Staff with more senior roles, including Ms McMillian, were reportedly due six months of base salary in severance pay, plus one week for each full year of experience, the lawsuit said.

Instead, staff received “at most” three months of pay after they were sacked. The total included one month of severance, as well as two months' worth of pay to comply with a US law aimed at providing workers with notice of firings, according to the complaint.

It says this was a “fraction” of the $500m to which employees were entitled.

This didn't go unnoticed in the payroll industry. In a recent post, Papaya Global CEO, Eynat Guez, referenced Scruples, the moral dilemma game, writing, “In Payroll, you can run the red light - skip on payments or misclassify employees - but you run a huge risk. It's not a question of if you get caught, it's a question of when. And when you are caught, the question becomes about severity of the penalties.”

She continued, “But for me, it was never a question of consequences. It's a question of scruples. You do Payroll right because it's the right thing to do. You don't take shortcuts. You don't round corners. You don't run the red light. People work, they deserve to get paid. There is no dilemma.”

Twitter no longer has a public relations department and the company did not release a comment.

In November, after a round of mass layoffs, Mr Musk stated that staff would receive three months' worth of pay, “50% more than legally required”.

In the complaint Mr Musk was accused of misleading employees about whether Twitter would honour the plan, reportedly leading some to stay longer at the company than they would have otherwise.

"Musk initially represented to employees that under his leadership Twitter would continue to abide by the severance plan," Kate Mueting - the lawyer representing Ms McMillian - said.

"He apparently made these promises knowing that they were necessary to prevent mass resignations that would have threatened the viability of the merger and the vitality of Twitter itself."

Source: BBC News

(Quotes via original reporting)

(Ms Guez’s quote via LinkedIn)