If you have recently been laid-off or terminated from your job, the financial consequences are likely your most immediate concern. Depending on the circumstances of your situation, you may be wondering if you’re entitled to a severance package and whether the offer will be adequate.
A severance package is essentially an offer to provide compensation and/or benefits to an individual upon termination of employment. At Joseph & Norinsberg, LLC, our experienced NYC severance lawyers will review your unique case to determine the best legal strategy for moving forward.
Severance Packages for Executives in New York
Let’s start with the basics—New York employers are not legally required to provide laid-off or otherwise terminated employees with any type of severance package. Furthermore, when severance packages are part of the employment separation process, there is no law governing what those packages must include. Even so, severance packages are a common component of employment separation agreements in NY, especially in the event of company mass lay-offs, and when an employee reaches retirement age. This is particularly true for executives.
Although severance packages are not required by law in New York, they are commonly offered to executives. And even if you are not offered a severance package, you may be entitled to one. It is not uncommon for employment contracts to state that the employee is entitled to severance pay when certain conditions are present, for example. If you are entitled to severance pay, it’s critical to ensure that you’re getting the maximum compensation and benefits package available. This is why it is so important to have an experienced NY severance attorney review your separation agreement before signing anything.
What Is Typically Included in a Severance Package in NY?
As severance packages are not required by law in New York, there is no specific formula indicating what should be included. That being said, severance packages usually include at least one of the following:
- Cash payment—Known as “severance pay,” this cash payment can be made over a period of time, or as one lump sum. The amount of severance pay is generally tied to your role and length of time at the company. It can be as much as a year or more of your salary, or as little as a percentage of a single paycheck. You may also receive additional pay for unused vacation time.
- Health insurance—As part of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employers must allow workers to keep their health insurance for 18 months, at the worker’s own expense. During this 18-month period, the premium payments will remain at the company rate. Some employers will continue to pay for a terminated employee’s health insurance for a period of time, however.
- Stock options—If your employment contract included stock options, your severance package may detail these as well.
- Separation agreement—This contract outlines the details of the offer, such as the date of separation, and any cash payment, insurance coverage, and stock options, as well as obligations that you must fulfill as part of the agreement.
Your former employer may also offer to pay for job placement services to help you secure new work. An experienced NYC severance attorney can help you protect your rights and determine how to proceed.
Understand Your Severance Agreement To Protect Your Employment Rights
Your employer isn’t offering you a severance package to be sweet. There is always something in it for them. By accepting a severance package, you are generally signing away rights to something, such as the right to sue the company. You may also have to sign a non-compete agreement. This is why it is so important to ensure that you fully understand the terms of the severance package before signing.
Under New York law, an employee age 40 or older has a 21-day window within which to review a severance offer and accept or refuse. That timeframe is increased to 45 days if the termination is part of a mass layoff. Employees under age 40, however, have no such protections.
The Separation Agreement is the part of your severance package that, once signed, waives certain rights, such as your right to sue the company at a future date. It may also utilize non-compete or non-solicitation language, both of which can severely limit future job prospects. Do not sign this document without first reviewing it with your severance agreement attorney.
There are other red flags to look for, such as non-disparagement and non-disclosure clauses, which can function similarly to a gag order if biased toward your employer.
Furthermore, accepting a severance package may disqualify you from other benefits, including unemployment compensation. If your severance compensation exceeds New York’s weekly max for unemployment compensation, you may not be entitled to receive any benefits at all.
There are myriad considerations to be aware of when negotiating a severance package, and having a skilled New York city severance lawyer by your side can ensure that you consider all of them, carefully.
Frequently Asked Questions About NY Severance Packages
Can You Negotiate a Severance Package?
Whether or not you can negotiate a severance package depends on the circumstances of your unique situation. If your employer engaged in any unlawful actions, at any time during your employment or the termination process, you may be able to use this as leverage in severance negotiations. For example, if your termination resulted in a breach of employment contract, or you suffered workplace discrimination (based on gender, sexual orientation, race, age, etc.), sexual harassment, or wage-and-hour violations, you are more likely to be successful in negotiations for a substantial severance package.
What Are The Standard Severance Packages For Executives in NY?
Although severance packages are different for every individual, there are some characteristics common to executive severance packages in New York. At the start of employment, it is wise for any executive to negotiate a severance package. However, such an agreement can be made at any time during the course of employment, including upon termination. If your termination is due to a company downsize, merger/acquisition, plant closure, or as an incentive to early retirement, you may have the leverage needed to negotiate for a more attractive severance package.
What Do Most Executive Severance Packages Include?
Most executive severance packages include:
- A cash payment made as a lump-sum or in multiple payments, generally based on six months to one year of the executive’s salary; and
- An additional cash payment for equity and bonus.
The above inclusions are fairly standard to executive severance packages, but cash payments can be much less or much greater than what is considered standard. A New York City severance lawyer can help.
Contact a New York City Severance Attorney Today
If you are being terminated from employment due to a merger/acquisition, company downsize, plant closure, or as an incentive to early retirement, you may be entitled to a robust severance package. The skilled legal team at Joseph & Norinsberg, LLC can help you protect your rights and determine how to proceed with negotiations. Book a free and confidential consultation through our website today.