Before you accept a severance package, it is important to remember that all severance packages are up for negotiations. It may be tempting to take the package at first glance, and many employees do—deciding that, at this uncertain time as they leave their job, simply accept the first offer by their employer without a second thought. Here at Coffman Legal, our Dayton severance negotiation attorneys realize that leaving your job is a stressful event, and with so much uncertainty ahead, it is critical that your employer’s severance package accurately not only reflects the value that you brought to the company, but that it is substantial enough to see you through the next phase in your life as you seek other employment, take time to go back to school, or plan for retirement.
A severance package is a type of benefit, or multiple types of benefits, provided by an employer to an employee who is leaving the company. Examples of types of benefits include the following: Lump sum financial payment; Profit sharing; Continued salary compensation; Continued health insurance; References for getting a new job; Outplacement job assistance; and Retirement compensation. There is a catch to accepting a severance package, though. Your employer gains something as well. By accepting a severance package, you are likely giving up your right to any potential claims against your employer. Essentially, this means that your severance package is an incentive for you, the employee, to not sue your employer in the future for wrongdoings, such as discrimination, a hostile work environment, or sexual harassment. A common rule of thumb is that for every year of employment, a severance package provides one to two weeks of continued salary (or an amount agreed upon earlier in the employment contract). This may be far less than what you could potentially walk away with if you sued your employer for some type of wrongdoing. This is why it is important to discuss your case with an attorney before agreeing to anything that your employer offers.
According to a survey conducted by Randstad Risesmart, 56 percent of human resource leaders offered severance to all employees after an involuntary separation, while the remaining 44 percent only offered a severance package to certain employees, such as managers, officers, and senior executives, according to CNBC. However, most employees in low to mid-wage positions receive no type of severance package. According to the Department of Labor, employers are not obligated to provide any type of severance pay under the Fair Labor Standards Act.
Never assume that your employer is offering you a severance package simply out of the good of their heart. There is almost always something in it for them. If you have been offered a severance package by your employer, our Dayton severance package attorneys at Coffman Legal, LLC can look over the contract for you, discuss what you may be giving up by signing the contract, and help you negotiate a higher severance package. Call us today at 614-949-1181 to schedule a free consultation.