When someone is securely employed, they may not want to think about severance agreements. However, if you are terminated, it is essential that you know your rights. A severance agreement is a contract that defines the terms of employment termination, such as when a layoff occurs. Typically, this agreement will ask you to waive your right to sue your employer, and it will spell out how much severance pay you will receive, and when you will receive it. If you are not happy with the severance agreement your former employer has offered, you do have the right to negotiate, but there are certain things you need to keep in mind.
A Legally Enforceable Agreement
A severance agreement is an enforceable legal agreement that you can either accept as-is or negotiate. It is always wise to consult with an attorney before signing such an agreement because when you do, you give up your right to sue your employer. The agreement may also demand that you not speak negatively about the company, and that you avoid seeking employment with a competitor.
Not all companies offer severance pay, but when they do, there are certain standards they must provide. These may include:
- Severance pay for an hourly union employee is usually one week of pay for each year of service, up to 26 weeks, or two weeks of pay for each year of service, up to 26 weeks, for non-union employees. Executives will usually receive six to 12 months’ pay.
- An employee may also be compensated for unused sick time, vacation pay, and personal days.
- Employers may cover health insurance benefits for the duration of the severance, or for a lesser specified time-period.
- Certain employers will offer employment counseling.
- Be aware that severance pay may play a role in unemployment insurance, depending on your state’s laws.
Should You Negotiate?
You always have the option to negotiate a severance agreement that is offered to you. If your severance is part of a layoff where other employees have also been let go, it is unlikely that you will be able to negotiate. However, if your termination is an isolated event, you may be able to ask for more.
You can determine what to ask by considering multiples of your base salary and bonus. You may have more leverage if you have been with your company for a long time. However, keep in mind that the more you ask for, the longer your waiting period is likely to be. You may wind up with what was originally offered, or even less. No matter what you wind up with, you will likely be required to keep it confidential.
If your employment has been terminated, the Philadelphia employment lawyers at Sidney L. Gold & Associates, P.C. can help you obtain the severance agreement you deserve. We can also help you evaluate the fairness of your agreement and understand its terms. Contact us online or call us today at 215-569-1999 for a free consultation.