Expect From Your Severance Package
The terms of your severance package are typically set by company policy, but you may be able to negotiate the amount. You might want to consider what you’re getting paid compared to others being let go, and whether that compensation is sufficient for your needs. You also might want to ask about keeping any benefits such as the use of a company vehicle or your membership in the company gym.
The purpose of severance pay is to compensate employees for their time at the company, as well as any unreimbursed business expenses. The amount an employer pays varies, but a common formula is to pay one week of salary for each year of employment. Some companies also pay for unused vacation and sick leave, while others do not. The terms of a severance package can be complicated, but the best way to ensure that you get all the money you’re entitled to is to review the company policy and discuss it with your manager or HR representative.
An employer is generally not obligated to pay severance pay unless it is required by law or by company policy, collective bargaining agreements, or an employment contract. You should check with your state labor department for laws that affect severance pay in your area.
You should also understand that severance pay can be taxed. If you have questions about the taxes on severance pay, it is important to consult with your tax advisor or contact a firm that specializes in employment issues. If your employer is terminating employees in connection with a mass layoff or acquisition, it may be subject to regulations and laws such as the WARN Act that require advance notice of layoffs or terminations.
What to Expect From Your Severance Package
If you are being terminated without cause or for good reason, or if you have been involuntarily separated from your job as part of a reduction in force or the sale of a business unit, you will receive severance pay equal to six months base salary. In addition, the company will continue at its cost the current medical and dental coverage elected by you as of your date of Termination for the duration of your severance pay period.
The company reserves the right to offset against any how to get severance pay paid or payable to an executive any value of any property that has not been returned, and the company, in its discretion, may also offset against any Severance Payments the amounts owed by the executive to the company under short-term or long-term disability plans or arrangements maintained or contributed to by the company. This includes any severance pay resulting from the purchase of stock options by an executive.
If you are being let go because of age discrimination, it is essential to have a lawyer look at your severance agreement before you sign. The Age Discrimination in Employment Act has specific requirements for waiving your rights, including a requirement that you fully understand the consequences of signing a waiver of your legal claims.
