Severance, as defined by the American Heritage Dictionary is: "The state or condition of being severed or separated, as in the ending of a relationship." Nevertheless, as most of us know the definition, it is a company benefit, a parting gift, something to walk away with, and better than a watch at retirement (generally). However, unlike retirement, no matter what your pockets are loaded with when you leave that job you are still going to be left looking for a new job in a tough market.
As a recruiter, I have heard of severance packages that range from nothing at all to two weeks worth of pay or up to 6 months of full pay including what would have been made with the benefits. Sometimes these numbers make you want to take a look at your own employment contract and often times you will find that severance is not guaranteed.
What? No severance? Is that even legal? In fact, there is no law that requires a company to give any severance pay. Unless you have an employment contract or were party to a collective bargaining agreement that set terms of severance up front, you were an "employee at will." (That means that you can be fired at any time with or without cause, just not for a discriminatory reason.) So regardless of how good your performance or how long you worked for a given employer, the company is not required to give you anything when you're terminated.
If you find yourself joining the thousands of Americans who have been laid off in the current economic downturn, be sure to get all you are entitled to when you walk out the door by negotiating the best severance package possible. Too many employees take whatever they are offered, not realizing that a sweeter deal may be available just for the asking. Here are some tips for successfully negotiating a severance package with your employer.
- Do not sign anything right away. After breaking the bad news, the HR rep will try make you sign a release within two hours. Don't. If you're being cut as a part of a general layoff, you have at least three weeks to sign your severance package agreement, which is really an agreement to not sue the company. If you did sign it -- and if you're older than 40 --you can revoke your signature within a week.
- No severance package is take it or leave it. Negotiate. Your employer expects you to. The most important thing to them is that you do not sue and go away without controversy. They can't take away a severance package once they've already offered it.
- Do not, however, negotiate while you're still in shock. Go home. Eat dinner. Weep. Then come back and make them pay you more to go quietly.
- Find out how many others are being cut from your particular office. If it's 50 or more, the WARN act requires your employer give you 60 days notice (or at least 60 days pay).
- Make sure they offer continued health benefits. Federal law requires 18 months of continued coverage via COBRA. Sometimes you can make them pay for some of it.
- Make sure you're getting the bonus you earned last year. In fact, make sure you're getting paid for all your accrued benefits, such as sick days or vacation time.
- Ask for outplacement services -- or money to pay for them.
- Make sure your severance package is commensurate with your tenure. You should get more than the people who worked for you and peers who have been at the company for less time.
- Get advice from a professional, not just a blog post.
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