Many workers are quick to negotiate for attractive wages and benefits when applying for a position, but few know this is also possible before you depart the organization. Negotiating a better severance agreement can relieve the stress, transition time and financial burdens after leaving your current job. Here are some tips for how to do it.
What is a Severance Package?
A severance package is a group of benefits given to an employee as a final gift before they exit the organization. Federal law does not require businesses of any type to provide a severance package when terminating an employee’s job. Moreover, many states, including Tennessee, are “at will” states, meaning your employer agrees to give you a job and may terminate that position “at will,” or with really no legitimate reason.
However, in many cases, your employer may offer a severance package to help ease the blow of your termination or separation. Even if they do not, you can negotiate with them to get the best deal possible. Just as the law does not demand they offer one, no law requires you to accept an offered severance deal without negotiating for a better one.
Know Where You Stand
Many employees may feel they have no standing or grounds to negotiate a severance package. After all, being laid off or fired communicates pretty clearly the company no longer needs your services. If anything is offered, it might be best to take it and consider yourself fortunate.
But consider for a moment that you may have more leverage than you realize. If you are being let go after a long and successful tenure, it may be in the company’s best interests to do something substantial for you – especially to protect their public reputation and standing with other employees.
You may also possess knowledge that could be detrimental to the company if it became known. Evidence of violations, discrimination or other wrongdoing could prompt your employer to be more open to negotiations.
An Employment Law Attorney in Memphis can also help you realize any leverage you may possess, and provide valuable advice that can even the playing field when you enter into severance negotiations. Sometimes even having a lawyer present for the meeting with your employer can make a difference in the tone and flexibility of the negotiations.
Tips for Negotiating a Severance Package
Here are some valuable tips for negotiating a severance package from your employer:
- Don’t get emotional – this may be difficult, but angry outbursts and language will only harden your employer’s attitude. Approach all interactions calmly and reasonably.
- Don’t agree to the first offer immediately – employers often believe they hold the upper hand when offering severance; depending on your situation, you may have leverage to negotiate a better package. Use it.
- Read any offer carefully and be sure you understand everything – an Employment Law Attorney can help interpret confusing jargon and terminology, as well as make sure the offer is fair and not discriminatory in any way.
- Aim for more than money – extra pay can be helpful, but review your particular circumstances and negotiate for benefits that will help you in every way possible. You should seek to gain:
- Severance Pay: a few weeks of pay for every year worked is fair, but don’t limit yourself to this. Ask for a lump sum, and be sure to consider how taxes will impact what you receive.
- Insurance Coverage: ask for continued insurance coverage until you find another job or make other arrangements. Attempt to get a definite time frame in writing.
- Paid Time Off: be sure to obtain payment for any earned and unused paid time off, like vacation or earned paid sick days.
- Stock Options: if you own stock in the company, be sure to get the most out of it, including the parameters of when you can use it, sell it or other options.
- Placement Assistance: if you wish this service, ask if your employer could pay for placement training or assistance for several weeks or months.
- Company Perks: ask if you may keep company-provided equipment, like computers or tablets. You may also wish to continue a company-sponsored health club membership.
- Discuss proprietary knowledge and patents – generally, anything you develop or produce while working for a company belongs to them, but this can be different depending on your employment contract. Discuss how to handle such knowledge, if it can be used to get another job, or even the possibility of higher severance pay to guarantee the company’s sole rights to ownership and/or use.
The Crone Law Firm has Employment Law Attorneys who are ready to assist you when the topic of severance comes up. We can review contracts, explain offers and help in many other ways with your severance negotiations. Contact us by phone or online today and schedule a confidential consultation.