Losing your job is never an easy thing, especially when it is unexpected. However, some companies try to soften the blow of layoffs or firings with severance packages. These packages are designed to give the employee a sense of worth or value despite losing his or her job. Circumstances for your dismissal will affect any severance offerings, and typically no severance will be offered if you were fired for cause.
Ultimately though, no severance package is truly the gift it first appears. All severance packages are given as an exchange. You get the money and your employer gets to protect themselves from legal recourse. It is important to know what most severance packages include in order to determine whether you have been offered a fair deal.
While different terms may be stipulated in written contracts from when you were hired, some standards are usually used in determining how much pay an employee will receive in a severance package.
If you are an hourly, union employee, severance typically pays one week of pay per each year that you worked for the company, to a maximum or 26 weeks.
For salaried employees, this pay usually bumps up to two weeks per year of service with the company, but also caps at about 26 weeks.
If you are at the executive level, your severance pay is usually higher, ending with a pay package of anywhere between 6 to 12 months of pay.
Again, none of these numbers are guaranteed, so be sure to read all documentation carefully and listen and take notes at any severance meetings once layoffs have been announced.
Additional Severance Benefits
Depending upon the company and the circumstances behind the dismissal or layoffs, you may be offered additional benefits with your severance package.
Some companies will offer to extend your current healthcare benefits until you you’re your next job. This gives you peace of mind in case of medical emergencies. Even requesting a one month extension can help you avoid some of the costs equated with buying continuing insurance.
Pension and Investments
Find out how any pension, retirement, or company-invested stocks will be paid out. If you will be taking a loss due to the layoff, see if you can negotiate a larger payoff now. Ask for the company’s written policy on how these are paid out after layoffs and have your attorney review them with you.
Job Placement Services and Recommendations
Ask if your company can give you a month or more of free job placement service with an outside provider to help you find a new job. Additionally, ask for letters of recommendation and a public announcement of your departure that you can use when you apply for new positions so it is clear that your dismissal was not a reflection of your abilities.
Even if you are not offered these benefits as part of a group package, you can always request an individual meeting with HR to ask for any of these additional benefits. Severance packages are always negotiable, and you typically have up to 21 days to accept or reject a severance package, so be sure to use those days wisely.
If you have any questions about your severance package and wish to have an experienced severance attorney review them for you, contact the Severance Lawyers of Castronovo & McKinney at 800-399-5851.