Elon Musk Did Not Pay Severance:’X’ Still Has To Clear The Payments Of Over 2,000 Employees

Ex-employees are suing Elon Musk over allegedly unpaid severance pay.

The arbitration case could end up costing millions of dollars for Musk’s company.

Ex-employees have filed charges against Musk, and he has thus far failed to pay them.

Over 2,000 former employees of Tesla, SpaceX, and Twitter still have outstanding debts that Elon Musk must pay. The software firm is facing multiple lawsuits from former employees who claim they were not paid their severance. On Monday, a news outlet reported that the IT firm formerly known as X is currently involved in over 2,200 arbitration cases brought by former workers. The necessary costs associated with these lawsuits amount to $3.5 million, and that doesn’t include the severance payments Musk made to the employees he let go. Elon Musk fired over half of Twitter’s staff, including many executives, shortly after acquiring the company in October. When laid off, he would pay two months’ salary plus one week’s pay. Many former workers have complained that the software company has not paid them any of the promised perks.

According to reports, one of the lawsuits filed this year makes use of an arbitration clause in employees’ contracts, placing the burden of the arbitration costs on Musk Company at $1,600 per party disagreement compared to an ex-employee’s $400.The social networking platform has racked up an arbitration tab of nearly $4 million due to more than 2,000 claims.

McMillion was “Twitter’s head of total rewards” and oversaw the company’s benefits package for employees. She took her case to a San Francisco federal court. McMillian claims that Twitter’s 2019 severance plan guaranteed most workers two months of basic pay plus one week of compensation for each full year of service. The lawsuit claims that McMillian and other top employees were promised six months’ worth of base salary but never received it.

According to the reports, X is refusing to pay up since it has not insisted that the departing workers submit their differences to binding arbitration. Following this denial, the ex-employees sued again, this time to recover the costs associated with their initial action. Therefore, the former workers have launched a second complaint, demanding that the business foot the bill for the initial petition and its related expenses.

It should be noted that after acquiring Twitter, Musk fired a large number of people. In an effort to save money, he reduced the company’s employment from around 7,500 to somewhere around 2,000. Reports state that the latest round of layoffs at Twitter occurred after workers discovered they no longer had access to internal messaging platform Slack.

Many of his workers took offense upon hearing the news, but one wrote, “The worst take you could have from witnessing me go all-in on Twitter 2.0 is that my optimism or hard work was a mistake… I’m quite pleased with how the group has performed in spite of all the distractions.

Many of the laid-off workers are still waiting for Elon Musk to make good on his promise to pay them two months’ wages plus a week’s compensation. The action involves allegations that Twitter and Musk broke a federal law pertaining to employee benefit plans. Lawsuits alleging Twitter’s alleged failure to pay severance typically focus on claims under the benefits legislation rather than contractual violations. The company asserts that all terminated workers have been fully reimbursed.

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