If you are leaving a Company or terminated, knowing what to consider when it comes to severance pay is extremely important.
What is Severance pay?
Severance pay is money that*s provided to an employee who is leaving the company for reasons other than retirement. Typically, the circumstances surrounding severance pay include layoffs, elimination of a position, or other circumstances leading to the termination of employment. The purpose of offering severance pay is to help the employee stay afloat economically while they*re looking for a new job. An employer is also inclined to offer severance pay in order to procure from the employee a release of all legal claims arising out of the employment.
Severance pay is not required by Florida or U.S. federal law. Nevertheless, you may be entitled to severance pay under certain circumstances. First, if you work under an individual employment contract or a collective bargaining agreement negotiated by a Union, it may provide the right and associated formula for providing severance benefits. Additionally, if your employer has an established policy or has a practice of paying severance, you may be entitled to severance. Finally, if you agree to release certain rights, such as the right to sue for wrongful discharge, you may be entitled to compensation for your release of those rights.
If you have been terminated and offered a severance package, DO NOT sign the agreement immediately. Instead, take your time and review the documents. It*s also wise to have an attorney review and explain the documents to you before you sign them. Employers should give you a reasonable time to accept the offer. If you are over 40 years old, the federal law (the Older Workers* Benefit Protection Act) specifically articulates your right to review the agreement with legal counsel and your right to take up to 21 days to consider whether to agree to the severance terms.
Things to consider when reviewing your severance pay
Ascertain your legal position * Consider your tenure with the company, your performance history, and any legal claims arising out of your employment that your attorney raised during the consultation. It is important to have a candid discussion at your attorney consultation so that an analysis of your situation and associated legal options may be accomplished.
Negotiating a Severance * When consulting an attorney, he or she may recommend attempting to procure a higher severance. It is important to consider a realistic amount based on your discussed damages. Sometimes companies may have policies as to severance so it is important you share these with your attorney.
Also, consider non-monetary compensation * You may be able to request that your attorney request health insurance, career placement assistance, and even to agree on your exit message and future references.
Consult a professional * Consult an Employment Attorney before signing a severance agreement. Keep in mind that you may be surrendering your rights for future claims or limiting your career with an onerous non-compete or non-solicitation clause.
Getting a new job can be a long process, that is why knowing your rights when it comes to your severance package can help you address whether you may be able to remain economically stable until you can secure new employment. We recommend you consult with a Board Certified Employment Attorney about your case, because every situation is different, and severance agreements can be complicated. A qualified Employment Attorney, can review the severance package, explain the legal consequences that it involves, and help you negotiate a better severance pay.
[This article is intended to provide a general discussion of severance issues and is not intended to offer legal advice.]
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