Introduction
As we look to the future and a possible recession, we should know how to handle a layoff. Depending on your employer and your position and your Union affiliation, you may be eligible for a severance package. But how much do you get? And what should you ask for? Here are some tips on how to negotiate your severance package, including some things to consider and questions to ask before signing an offer of any kind.
What to ask for if you’re laid off
If you are laid off, it is important that you ask your employer for a severance package. You may not receive one automatically, but it’s worth asking for one rather than waiting and hoping that they’ll offer one without being prompted.
Make sure to ask for:
- Compensation: Money paid in exchange for leaving your job (almost always)
- Benefits: Other benefits that you would have accrued through working at the company, such as health insurance or retirement plans (usually only paid out when someone dies)
- Fair severance package – Since this won’t be the last time you work with other companies or start a new job, it is important not to burn bridges by asking for too much money from this particular job alone.
Asking for more severance
A severance package is an amount of money that an employer offers to a departing employee. The purpose of this agreement is to help ease the transition from employment. A severance package differs from a termination package, in that the former only applies when the employee leaves voluntarily; termination means they were fired or laid off due to company downsizing.
If you’re leaving your job and have been offered a severance package, you may be wondering if it’s worth taking. Here are some things you should consider:
- Is there anything else I could get? Although it might be tempting to think about what else you can do with your life right now, it’s worth considering whether or not there are other opportunities available before making a decision on whether or not this particular offer is worthwhile. It may also help to consult with someone who knows how much money companies typically offer their employees during exit negotiations—often times these figures range from one month’s salary up through six months’ worth (or sometimes even more).
- Have I been treated fairly? If this was brought up during negotiations and discussed openly between yourself and HR representatives (or whoever makes decisions regarding staff cuts), then chances are good that everything has already been considered carefully beforehand – including how much money will be paid out as part of any given agreement between parties involved in reaching such an understanding.”
Consider the value of benefits
The value of the benefits you receive from your employer is often overlooked, but it’s important to consider them when deciding whether or not to take a severance package. Your health insurance, life insurance, disability insurance and other similar benefits are valuable components of your compensation package that are often included in the calculation of an offer for a severance package.
- How long have you been with your employer?
- Have you been with them long enough to qualify for certain types of coverage?
- How much do these benefits cost per month (or year)?
- Does this amount remain constant throughout time or does it increase as time goes on (and/or if you move up)?
Things to insist on as a buffer before signing a severance offer
We’re going to assume you didn’t ask for this. Most people don’t plan on having to find a new job in the next month or two, and even fewer want it. But if you do, here’s what you should insist on before signing a severance offer:
- A Severance Agreement: Eliminate ambiguity surrounding the terms of your departure by having everything clearly stated in writing. For example, make sure there is no cap on how much money they are willing to pay out over time and make sure they agree not just not sue you but also indemnify (or protect) you from any potential claims against them as well!
- A Non-Disclosure Agreement (NDA): An NDA is like a legal contract that binds both parties from disclosing information about their business relationship after employment has ended. This can include sensitive corporate information such as trade secrets or proprietary processes. They might require an NDA from other employees too so look into whether or not one exists before signing anything else!
You may be entitled to more than you expect – and now is the time to negotiate.
If you’re considering negotiating a severance package, here are some tips to help you get started:
- Know your worth. At the very least, know how much you were making and how many years of service are on your resume. Your former employer is not obligated to share that information with you without a court order (or not), so this can be tricky if they won’t tell you what they’re paying other employees with similar positions in the company. If possible, find out what other employees in similar roles at similar companies are being paid and use that information as leverage in negotiations. We have written about this topic before, to learn more about wage negotiations visit our blog on the topic. LINK
- Be prepared for rejection. Even if a company has agreed to pay out a severance package upon termination, its legal team will likely try to negotiate lower terms than those offered by HR during exit interviews – especially if there’s been some kind of misconduct involved or discrimination against an employee due to age or racial identity; in these cases, it’s likely that any agreement reached through negotiation would have already been given based on law alone. If you are rejected it is not too late, this may be when an outside consultant may be worth the investment. It is always best to have your consult on retainer prior, however, if this did not occur it is not too late. There are many consultants out there as well as law firms. To learn more, I have reviewed a few blogs on this matter and identified one that rose to the top. Here is the link to their article on the matter. LINK Halunen Law, is a Minneapolis firm representing employees, executives in severance negotiations, and whistleblowers.
Conclusion
If you’re worried about the future of your job, it can be difficult to focus on anything else. While we don’t have any concrete answers for you currently, we do believe that it is important to have a plan in place before something bad happens. We hope this article has given you some ideas about how severance packages work and why they may be beneficial to you and your family in a difficult situation like this one.
