Salary Continuation Agreement

A salary continuation agreement is a contractual agreement between an employer and an employee, where the employer agrees to pay the employee a certain percentage of their salary for a specified period if the employee is unable to work due to illness or injury.

In the event of a prolonged illness or injury resulting in the employee being unable to work, a salary continuation agreement can provide financial support for the employee and their family, covering expenses such as medical bills and daily living expenses.

Salary continuation agreements can also offer benefits to employers, as they can help to retain valuable employees during times of hardship, and provide protection against employee litigation.

When negotiating a salary continuation agreement, it is important to consider factors such as the length of the agreement, the percentage of salary to be paid, and any restrictions on the employee`s ability to work for competing companies during the period of the agreement.

It is also important to ensure that the agreement complies with relevant laws and regulations, such as the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA).

Employers may wish to seek the advice of legal and financial experts when drafting a salary continuation agreement, to ensure that it accurately reflects the needs of both parties and provides adequate protection against unforeseen circumstances.

In summary, a salary continuation agreement can provide a valuable safety net for both employees and employers, ensuring that financial support is available during times of illness or injury, and offering peace of mind to all parties involved.

About the Author