Severance pay is one of the most important parts of many employment packages. This type of pay is designed to keep employees from suing for employment-related violations, and may also include non-disclosure and non-compete agreements. Severance pay is also designed to bridge the gap between jobs so that employees can continue to pay their bills while looking for a new job.
It’s all too common for employees facing layoffs to sign severance agreements without thinking of the consequences. Getting the assistance of an attorney with experience in employment law can help prevent employees from waiving rights and taking on legal obligations without fully considering the legal and money ramifications.
Why Your Severance Package Matters
Losing a job is very difficult for all employees. A majority of all American workers have faced being without an income for a year at some point before turning 70 mostly due to job loss and limited employment opportunities.
The longer a person goes without a job, the harder it is to save and plan for retirement. Finding a new job with a comparable pay level is statistically harder after a job loss.
Having the right severance package could make all the difference in whether you can meet your expenses after leaving the company. The compensation that you receive after leaving a job is not something you should be dismissive about. You must fully consider all of your options and fully understand what the company is offering when you receive any severance package.
Does Your Employment Contract Address Severance Pay?
There are two common ways that employees receive severance pay. First, many companies have severance policies which apply to all or most employees, and provide severance pay pursuant to a formula. For example, a company may have a policy which provides two weeks of severance pay per year for every year the employee has worked for the company. All employees who qualify for severance pay under the policy receive such pay.
Second, employees may be able to receive individual severance payments when their employment ends. Some employees may have an employment contract which mandates severance pay. Likewise, employees who do not have an employment contract may be able to negotiate individual severance payments.
Working with an employment lawyer will help put you on better footing in such a case. Attorneys who handle these types of cases know about the types of tactics that businesses may use to deny you severance pay you should receive and/or individually negotiate you a better severance package than what the company initially offered you.
Generally, the company’s initial severance package is the company’s opening offer and most employees can negotiate a better deal if they utilize an employment attorney. Employees can pay employment attorneys an hourly rate or a contingency fee to negotiate better severance packages.
What Other Violations May Also Occur With Severance Issues?
Severance packages can be tricky because they govern any pay, benefits, and future interactions with the company once your employment ends. Besides pay, some key severance package components include continuing your health insurance benefits, outplacement services, reference requests, non-competes, and confidentiality. Employees must make sure that they understand all their obligations once they sign their severance package.
Finally, and most importantly, severance packages most always mandate that employees waive all employment-related legal claims and agree not to sue the employer. This means that employees forfeit and give up forever all unpaid wage claims including unpaid overtime, all discrimination and harassment claims, and all other legal claims connected with their employment. Often, employees have legal claims which are worth much more than the employer’s severance pay offer. This is why it is crucial for employees to talk to an employment attorney when they receive a severance package and believe they may have employment-related legal claims.
Your Next Steps Regarding Severance Pay
Employees benefit from having an attorney look at any severance agreement that they receive from their employer. If you know what your agreement entails, you’ll be in a better position to maximize the payment you receive from everything you experienced at the employer.
If you have any concerns about getting the severance that you are owed, there is nothing to lose by seeking legal help. Contact Rowdy Meeks Legal Group LLC today to get the help you need with evaluating your employment-related claims and obtaining the severance pay you have earned.