What Is Severance Pay?
When there is a termination of employment, there may be an offer of severance pay. The amount granted may be calculated based on the length of employment, an amount may be stated within an employee contract, or may be a number arbitrarily selected by an employer.
If you are in the process of negotiating an agreement or you are asked to sign to the terms of a severance package, a severance negotiation lawyer can help. When questions arise in connection with Ohio severance packages, contact a Columbus employment attorney. Our severance review and severance negotiation attorneys are here to help answer any questions or concerns.
What Are the Terms of a Severance Agreement?
There are differences between companies on how severance packages are handled. For most, the severance pay is connected to the time period a worker was employed. For instance, the pay could be a certain amount for every year of employment.
Items that could be included in a severance package include the following:
- Calculation of payout based on years of severance. Severance pay is typically given as a lump sum but there are instances when the payout happens over a stated period of time.
- Bonus pay and vacation pay. When an employee has commission bonuses or vacation pay that has not been utilized, the company may payout for that amount.
- There can be information on continuing benefits within a severance package.
While a variety of insurance coverage is offered to employees, such as health insurance, dental insurance, life insurance, vision insurance, and more, often the most concerning to employees being let go is losing health insurance.
If the company does not offer to pay for coverage they are required let an employee know about the Consolidated Omnibus Budget Reconciliation Act (COBRA), a way for former employees to access company health insurance. COBRA is available when an employee leaves an organization or has hours cut and is no longer eligible for company benefit coverage. But COBRA is paid for by the former employee, so it is generally extremely expensive to the point that it is unaffordable.
Why Do Companies Give Severance?
Severance packages can be extremely helpful to employees who are suddenly unemployed. After all, there is compensation and possible benefits to fall back on until another position can be secured. That said, it is important to remember that companies are not offering packages solely to help former employees, they are often doing so to protect the company.
In order to receive severance, it is common for an employee to be asked to sign documents that do not allow the person to share the terms of the agreement, will waive any and all rights of the former employee to take any legal action (known or unknown), or speak poorly about the organization. Before signing a legal document, talk to a Columbus employment attorney as the severance agreement was likely drafted by an attorney with the employer’s interests in mind. Indeed, most severance agreements encourage people to discuss the agreement with an attorney because the rights being waived are important and the agreements are enforceable. An experienced severance negotiations attorney knows how to protect your employee rights.
Have you been given a severance agreement by your employer? Contact the severance negotiation lawyers at Coffman Legal LLC for a severance agreement review and negotiation. We are strong and committed advocates for all Ohio workers and use our experience and knowledge to help you when faced with a proposed severance agreement. Call 614-949-1181 for a free and confidential consultation about your severance agreement.