Can Severance Pay Be Negotiated?

Severance Pay Be Negotiated

If you’re let go as part of a company-wide layoff, your employer may offer you a package to help you transition to a new job. While companies don’t have to pay severance, many choose to do so in order to show goodwill and keep professional relationships intact. The amount of severance you receive and the terms of the package are usually negotiated, but you should be aware of your legal rights before accepting one.

Depending on the circumstances, severance pay packages can include several different items, including cash, stock options, and continuing insurance benefits. They might also include unused vacation or sick leave, as well as reimbursement for any previously unreimbursed business expenses. If you’re unsure of what to ask for, research the industry and your own experience to understand what is standard in your area. You can also ask your fellow severance package recipients for advice and feedback, and look up information on your state’s unemployment benefits requirements.

In some cases, your former employer will want you to sign a non-compete or non-disclosure agreement as part of your severance package. While they can’t compel you to do so, you should consult with an employment attorney about your legal rights before agreeing to these terms. In addition, if you’re over 40, the Older Workers Benefit Protection Act gives you 21 days to review and seven days to revoke a severance agreement.

Can Severance Pay Be Negotiated?

Even if you’re a valuable employee, your employer might be reluctant to negotiate your severance pay, especially if they’ve already outlined a specific compensation package in a letter. However, you can try to convince them to increase your payment by highlighting your value and the company’s loss. If you’re being laid off as part of a company-wide reduction in workforce, you could argue that the company will have to pay more money to replace the losses it will incur because they’ll have a harder time finding new employees with similar skills and experience.

A company will probably set the amount of salary calculator Ontario they’re willing to give in a particular situation by using a formula, such as one week for every year of employment. In some cases, companies will set their severance pay in relation to the current unemployment rate, which can make it difficult to increase the amount.

If your employer is unwilling to budge, you may be better off accepting the original offer and moving on. If you’re concerned that the terms of your severance package could negatively affect your future employment prospects, talk to an attorney or call your state’s unemployment insurance agency for personalized information. However, if you’re confident that you can find a comparable position in the near future, negotiating your severance package might be worth the effort. Besides a higher pay, you can ask for other items that might make your departure easier, such as career coaching and access to a network of professional contacts. You can even offer to train the new hires who will take over your responsibilities in exchange for a larger severance package.