Whether you sensed it was in the works or it came out of the blue, termination from your job is seldom an easy event. You may have to dust off your resume and reach out through your network for job opportunities. You may end up depleting your savings, if you are fortunate enough to have one, while you look for work. You may dread the thought of filling out applications and going through job interviews, but you need money to survive.
However, you may see a bright spot in your termination if your employer offers you a severance as part of your separation agreement. When you think of the potential struggles ahead, you may feel tempted to snatch it up and shake the dust from your shoes as you leave. This is not always a good idea.
Severance may include a sum of money, either in a lump sum or in payments over time, that an employer offers a worker they are letting go. There is no set amount, but a severance typically falls between one and four weeks’ pay for every year you worked for the company. Many factors may determine where you fall on that scale, including:
- The reason for your termination, for example an employee dismissed because of downsizing may receive more than one fired for not meeting quotas
- The thoroughness of your boss’ employee records and performance reviews
- Whether your performance reviews were generally positive
- The terms of your employment contract
An employer rarely offers a severance without some sacrifice on your part. Your employer may require you to sign an agreement forgoing your right to sue for wrongful termination or discrimination, or restricting you from accepting employment with a competing company. You should consider these factors carefully before signing, since they may have long-term ramifications.
Other benefits to negotiate
Every state has its own laws regarding what an employer may or may not negotiate in a severance package. For example, you may be able to haggle for accrued vacation pay or unused sick leave. You may have a right to seek a letter of recommendation or even help with your job search. Although your employer must offer you continued insurance coverage at your expense, you may negotiate financial assistance with those payments.
As you can see, there are many items to consider, and others may be unique to your industry or situation. The advice to seek an attorney’s review of your employer’s offer is not a suggestion you should ignore. An attorney can assist you in obtaining the most complete and fair severance your employer can offer.