Have you or someone you know found yourself unexpectedly unemployed? Laid off, downsized, fired…whatever the official reason, you are suddenly uprooted from a job that seemed relatively secure. Sometimes you are completely blindsided.
When and if you or someone you know experiences this kind of termination, the issue of severance pay may figure prominently into how you cope with your dismissal and subsequent job search. It may surprise you to know that severance pay is an optional benefit and your employer does not have to offer you severance. New York State supports “at will employment” which means your employer can terminate you at any time and offer you nothing. Similarly, you too can quit on the spot without any obligation.
A termination is a stressful event. Not everyone can think clearly under such circumstances; however, if your employer asks you to sign a formal separation, non-disclosure agreement you may have some leverage to work out a departure deal to your best advantage. A typical severance package is based on your length of service with that particular employer. Many companies offer one week of pay for each year of service. A severance package is generally offered when your former employer wants to silence you and any future claims you may have against the firm for wrongful termination.
Before you sign any form thrust your way, regardless of what they call it (a termination agreement…a severance agreement…a release agreement…a separation agreement), understand that it is a contract and is probably stating that you do not hold the company liable for terminating you. It’s a good idea to run this paperwork past your attorney or one that specializes in employment law, especially if you feel the firm’s actions were illegal.
Remember, the end of a work relationship doesn’t have to be excessively painful (even if it wasn’t expected), if you feel you are walking away with the best deal possible and if it is one that you help construct. Here are some tips:
- Be sure to collect any remuneration for unused vacation or personal time, any overtime and any unpaid, earned bonuses.
- Be realistic in your demands. Your ex-employer is most likely to tie your package into your past performance. Be able to clearly spell out what achievements and contributions you’ve made to the organization so that any monies you request may be directly attributable to these efforts.
- Ask for things like extended health coverage, paid by the firm. You’ll also want an excellent letter of reference.
- Ask that any former non-compete be null and void so that you have no future employment restrictions.
- Ask for outplacement and career counseling services of your choosing. This means the company will pay to have your resume professionally written and for any coaching regarding interviewing or other job search needs.
- Don’t settle or be intimidated. If you act professional and rationale in your approach, your employer is more likely to want to work with you. Like any negotiation, ask for more than you are willing to settle for.
- Lastly, if you receive a satisfactory severance package, exit gracefully, don’t burn bridges and don’t create bad morale for those you leave behind.
Terminations are painful, but they are not the end. Your career will continue and you will learn from the experience and you are likely to use this knowledge to create an even better deal for yourself going forward. Good luck.