The 8 Biggest Severance Pay Package Mistakes
Severance Pay Mistake #1
“There is no law which requires a severance pay”. True, but then why do all companies pay a severance?
There is no law which states that severance pay must be provided, but all companies provide severance pay because the different is far worse for them. Keep reading…
Severance Pay Mistake #2
“I’m an at-will employee so I cannot get severance pay”.
At-will employment simply method that you are employed for an unstated duration, not a fixed period of time. It method you can leave at any time, and, your employer can terminate your employment at anytime, but a termination must be for legal reasons and a layoff must be performed legally! Being in an at-will employment state, or having an at-will employment contract, does not average you cannot acquire severance-pay and a great severance package because you have leverage…
Severance Pay Mistake #3
“I have no leverage to get severance pay and I don’t want to ‘burn bridges’ with my company”.
Whether you were fired for poor performance, laid off, outsourced, or you have resigned, your employing company is fearful of negative publicity, complaints from former employees to board members, the possibility of being sued and the disturbing time and expense of litigation, and anyone speaking ill of the company. Companies want you to go away quietly and stop any possible controversy. All companies expect to negotiate severance packages in exchange for a Separation and Release Agreement, so you will be leaving not only on ‘good terms’, but also on your own terms!
Severance Pay Mistake #4
“My company is bankrupt or is being acquired, so no severance pay”.
Most severance packages are provided when companies have no money, file bankruptcy, or simply cut costs by layoffs. In fact, severance packages provided during these unfortunate events are usually more generous.
Severance Pay Mistake #5
“My severance package is not negotiable and must be signed right away”.
Human Resources and your boss will push you to take the check they’ve already cut and sign a release agreement right away. Don’t do it as no employment situation is ‘take it or leave it’. Tell them you need to think this situation over. They will not, and cannot, withdraw the severance offer-already if you ask for more! In fact, there are federal laws which require them to give you three weeks or up to 60 days to consider the agreement-more than enough time to negotiate a better severance package.
Severance Pay Mistake #6
“I can negotiate a severance package by myself”.
People who do this always underestimate their own value, what their company has in the past provided to others, and, what their company will provide for them in a severance package. In addition, they leave out compensation, benefits and legal protections which can be negotiated and should be included in all severance packages.
Severance Pay Mistake #7
“I can review and understand the legal language within the Separation and Release of Claims Agreement my company wants me to sign in exchange for my severance package.”
All Separation and Release Agreements state that you should consult with an attorney and have the attorney review the release of rights prior to signing it. This is for your protection, as you may not understand or already see the hidden restrictive covenants within the separation/release agreement and within your original employment agreement. An experienced Employment Attorney with a Human Resources background is best qualified to review a separation/release agreement, not your family or business contracts attorney.
Severance Pay Mistake #8
“I will hire an attorney to represent me”.
Severance pay packages are produced and implemented by your friendly Human Resources Department. But, if you hire an attorney to represent you to negotiate a severance deal, your friendly HR Department MUST, and will, turn you and your attorney over to its corporate Legal Department and its attorneys. You will have a tough time negotiating a severance as corporate attorneys always take a tough stance against opposing attorneys. Your matter will be legally escalated into a battle of attorneys. And, it’s another story if you set afloat a lawsuit. The best severance deals come from HR departments.
To avoid these mistakes, you need both legal AND human resources experts on your side to assist you in getting the best severance package!
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