Layoffs and job terminations can be extremely stressful, causing emotional and financial challenges for those suddenly forced to search for new employment. Employers often provide a severance package, which can ease transitions. However, this package may not sufficiently support employees until they find their next job.
It’s natural to want to move on to the next job quickly, both mentally and physically. But it’s important not to overlook asking for severance benefits.
Table of Contents
- How To Negotiate a Severance Package
- Why Do Employers Offer Severance Agreements?
- What Is Typically Included in a Severance Package?
- Why You Should Work With a Lawyer To Negotiate Your Severance Package
- What Should You Do After Signing Your Severance Package?
- Contact Joseph & Norinsberg for Your Employment Law Cases
How To Negotiate a Severance Package
Understanding your priorities is crucial when negotiating a severance package. Remember, you do not have to sign a severance agreement if you do not agree with it.
Don’t Rush To Sign Paperwork
Employers will urge workers to sign the agreement quickly to facilitate a smoother layoff process. However, signing too quickly may cause you to waive significant rights or benefits. Properly analyzing the agreement and negotiating for better terms can prevent later regrets.
Get the Package Details in Writing
Make sure to obtain the severance agreement and any changes in writing. An oral agreement can be more challenging to enforce or prove in court if the employer does not follow or fulfill their part of the agreement.
Once you obtain the agreement in writing, carefully and thoroughly review the document and note any questions or concerns you have.
Seek Out Professional Opinions
Employment lawyers are a valuable resource for negotiating severance packages. An experienced lawyer can review the documents, clarify the meaning of the clauses and terms, and identify any potential red flags.
Negotiate for Benefits Outside of Money
It is essential to prioritize your needs when negotiating a severance package. Consider discussing benefits beyond compensation, such as job search assistance or an extension of company-sponsored health insurance. Employers may have more flexibility in these areas than with severance pay. Before meeting with your employer, make sure you have multiple negotiation options prepared.
Why Do Employers Offer Severance Agreements?
One of the main reasons employers provide severance packages to employees who have been laid off or terminated is to minimize the risk of expensive lawsuits. Offering severance can also help improve workplace morale for those who remain with the company and safeguard the organization’s reputation. It is important to understand that severance agreements are business transactions and not genuine acts of goodwill.
What Is Typically Included in a Severance Package?
A severance package usually outlines the exit benefits, the terms of the agreement, and a payment plan that specifies how you will receive your severance payments. Severance is often paid according to the company’s regular pay schedule. However, some companies may provide an immediate lump sum payment or create an alternative pay schedule.
Here is a brief overview of common benefits provided with severance agreements:
- Severance Pay
- Unused paid time off
- Continuation of health, vision, and dental insurance through COBRA
- Retirement benefit extension and information
- Career transition support
- Information on what will happen to your vested stock options or equity
An employment lawyer can help employees approach severance and negotiate severance packages.
Why You Should Work With a Lawyer To Negotiate Your Severance Package
Employment lawyers have the training and experience to assess the fairness of severance offers and identify any hidden clauses that the employee may overlook. An attorney can pinpoint potential legal employment claims against the company, such as discrimination and wrongful termination, and help safeguard your future career by addressing restrictive clauses and conditions.
What Should You Do After Signing Your Severance Package?
Prioritize your mental health and allow yourself time to process the situation. A surprise layoff or job termination can be stressful and overwhelming, so practicing self-care is essential.
Some other immediate steps to take after signing the severance agreement include:
- File for unemployment.
- Assess your finances.
- Update your resume and professional social media profiles, such as LinkedIn.
- Apply to new jobs.
Remember that your severance payout will still be taxed. To make the most of your severance pay, create a new budget for the transition period between jobs.
Contact Joseph & Norinsberg for Your Employment Law Cases
Understanding how severance agreements work and having seasoned legal representation can maximize your severance. Our knowledgeable New York severance lawyers can be pivotal in securing a severance offer that reflects your value and contributions to your employer while safeguarding your rights and future career prospects.
At Joseph & Norinsberg, we are committed to fighting passionately and aggressively for every client. Contact us online or call 212-227-5700 today for a free consultation.
