What To Look For In A Severance Agreement

But the harsh reality is that most severance agreements are more advantageous to the employer. Therefore, before signing a severance agreement, you should be aware of the following frequent mistakes that make outgoing employees. Your employer very soon has just provided you with severance pay. After verification, you might be lucky to have money, but you have questions: Jen Smith, the personal financial expert, was about five weeks from birth when she discovered that she was one of 45 people who were taken by her company. She would receive a severance package consisting of five weeks` salary and one month`s health insurance, and would then have the right to continue her insurance coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Even if you don`t intend to file a complaint against your former employer, an employment lawyer can help you negotiate a better severance contract. In addition, the lawyer can identify the legal options that you (and perhaps even your employer) did not know existed. Do some research to find out what severance benefits you can reasonably expect from your business, and then do your best to maximize them. If you consult an employment lawyer, they may also have an idea of what was offered to others in your former business. Remember, you have nothing to lose, and you`ll never know what you could get, unless you ask. Try to build an agreed announcement of your departure and a letter of recommendation. Ask them to design the documents themselves and make sure you include your key accomplishments. Add the letters to the agreement.

A company may be required to pay severance pay under the employee`s employment contract, the WARN act or its state equivalent or company policy. Although the company is not required to pay severance pay, it will often offer severance pay in exchange for various agreements of the dismissed employee, including the release of any claims against the company (see below). An executive has the best chance of negotiating severance pay if the employee has been dismissed for no “reason,” as defined in an employment contract. The company may include in the severance agreement a provision prohibiting the sacked employee from asking other employees to leave the company.