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Negotiating severance pay after being let go from a job

There are various circumstances in which an employer must pay his or her employee severance following a termination of employment. For example, severance pay could be required via the federal WARN Act, state laws or the employment agreement entered into by the parties. In other cases, when an employer is not required to pay severance, the employer might be willing to negotiate a severance package in exchange for entering different agreements with the employee -- like a release of potential claims against the employer.

Here are a few things to remember when negotiating a severance package:

  • Executive employees often receive six months to a year of severance pay.
  • Employees usually try to negotiate a higher severance if the loss of job resulted from an acquisition or merger.
  • Consider requesting a lump sum cash distribution rather than having the cash doled out over time.
  • Ensure that severance payments will continue even if the employee dies or becomes disabled.
  • Make sure the severance includes any unpaid bonuses.
  • Double check that the severance pay will continue even after obtaining new employment.
  • Will the employee continue to receive medical benefits?
  • Try negotiating for the employer to pay for outplacement services with a noteworthy outplacement firm that can assist you in finding a new occupation.

Do you need to negotiate a severance package pertaining to your employment termination? The more that terminated employees understand about their legal rights and options, the better capable they'll be of negotiating a fair and equitable severance package. The value of a fair severance package should not be underestimated as it can help support the employee financially while he or she searches for new work.

Source: All Business, "16 Key Issues in Negotiating an Employment Severance Package," Richard Harroch, accessed April 06, 2018

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