With the last few years of economic turmoil and recovery splattered with large corporate layoffs and an increased competitive job market, we realized the topic of severance needed to be covered. Despite its negative connotations, understanding your rights to severance and how to handle the situation as it arises may prove to be invaluable. So, first things first, do you know what severance is?
What is severance?
Severance is an amount of money given to an employee that is meant to help them during a time between jobs. Although it is most often monetary, severance can also come in the form of extended benefits. The amount of severance can be predetermined in an employment contract; however, it can also be calculated on factors such as company size, length of employment, hierarchy reached in the company, and other elements depending upon the employment circumstances. When discussing severance, be sure to negotiate because unless otherwise stated in a contract, no terms are definitive. Be firm in what you believe you are worth, however, always remember severance is given out in situations where a good relationship exists, so you do not want to burn any bridges while negotiating.
Am I eligible?
If you are a w2 employee, you may be entitled to severance if the company conducts massive layoffs without a 60-day notice and you are one of the impacted. Additional entitlements include you taking an early and unforced retirement, or if you have an employment contract explicitly stating you are entitled to it. The main case for ineligibility is if an employee was fired with cause. Also, in more specific cases, employers may offer severance even though it is not required in order to maintain a healthy relationship and to avoid legal issues being brought up by the employee after leaving the company. If you feel your employer is negotiating severance in order to diminish some of your legal rights, be sure to consult a lawyer as you will want to make sure the loss of any legal rights will not hurt you in the long run or put you in a compromising position.
Our suggestion to you is simple: If you qualify for severance, ask for it! Companies plan this as an employee expense, but most people rarely ask for it. Although severance may not be an exciting prospect because it comes with the loss of a job, knowing the facts will help you be prepared for any future situations which in turn will make the down time between jobs a bit easier to manage.
Have any questions? Ask the team here and we will be happy to help.
Written by Meghan Tooher
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