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I realize one possible misconception is severance vs "gardening leave" [0]. They look really similar, but legally entirely different. In "gardening leave" you

I realize one possible misconception is severance vs "gardening leave" [0]. They look really similar, but legally entirely different. In "gardening leave" you're still an employee and on payroll until the last day. Whereas severance you're not an employee and typically paid lump-sum (but doesn't matter for this discussion). So in this specific situation, yes, that would be wages and would be paid out first before creditors because you are _legally_ entitled to those wages. The problem of course you cannot hope to put a whole company on "gardening leave" in hopes that it can "act as severance" for everyone. Your creditors will sue you and easily win. They'd probably put an emergency injunction on the company and remaining funds before the first month was even completed once they learned of "creditors hate this one little trick!" [0] https://en.wikipedia.org/wiki/Garden_leave https://en.wikipedia.org/wiki/Garden_leave

thaumasiotes 3y ago
That's an unlikely misconception, since paid noncompete periods are not something that most people have ever even heard of.
- hamburglar 3y ago
  Paid noncompete periods are far from the only reason for gardening leave.
  - thaumasiotes 3y ago
    What are some examples that somebody might have heard of?
    - pasc1878 3y ago
      For gardening leave. You have X months notice ie the company has to tell you X months before yoir severance date. Often the company will want somone they let go out of the office ASAP. Thus you spend your X months on gardening leave paid as normal wages. On your severance date you get your redundancy package - in the UK there is a defined minimum but in some markets e.g. finance they pay more as they do want to keep current employees happy so they see that they just don't get thrown out. As much of the US is at will employment I doubt this scenario will occur often
    - hamburglar 3y ago
      The usual one I hear about is someone who’s in generally in good standing and who has a significant stock award coming, but who just isn’t “working out” and management gives them the gift of finishing out their term to get the bonus
    - mathgeek 3y ago
      It can happen during a partial acquisition where the relevant employees are likely to cause damage to or steal the product/property before the acquiring company has finished the acquisition (e.g. software with wide access that needs to be untangled).

thaumasiotes 3y ago

That's an unlikely misconception, since paid noncompete periods are not something that most people have ever even heard of.

hamburglar 3y ago
Paid noncompete periods are far from the only reason for gardening leave.
- thaumasiotes 3y ago
  What are some examples that somebody might have heard of?
  - pasc1878 3y ago
    For gardening leave. You have X months notice ie the company has to tell you X months before yoir severance date. Often the company will want somone they let go out of the office ASAP. Thus you spend your X months on gardening leave paid as normal wages. On your severance date you get your redundancy package - in the UK there is a defined minimum but in some markets e.g. finance they pay more as they do want to keep current employees happy so they see that they just don't get thrown out. As much of the US is at will employment I doubt this scenario will occur often
  - hamburglar 3y ago
    The usual one I hear about is someone who’s in generally in good standing and who has a significant stock award coming, but who just isn’t “working out” and management gives them the gift of finishing out their term to get the bonus
  - mathgeek 3y ago
    It can happen during a partial acquisition where the relevant employees are likely to cause damage to or steal the product/property before the acquiring company has finished the acquisition (e.g. software with wide access that needs to be untangled).