How to Negotiate Your Severance Package
Jacky Hayward | Monster Evolutions
March 10, 2010
When you are laid off from your job, one of your hopes is that you receive a good severance package, equipped with both severance pay and continued benefits. Most often, severance is based on how long an employee has been employed by the employer, but benefits often vary depending on the employer.
In addition, employers are not required to provide severance by the Fair Labor Standards Act (FLSA) when laying off employees; severance is a matter of agreement between the employer and employee. There have been several examples recently of companies giving employees laid off at different times varying severance packages, and, in the case of Nortel Networks Corp, which just declared bankruptcy, some employees severance has been frozen while other employees laid off later will not get any severance at all. This article is to educate you about your severance package rights and to help you negotiate your severance.
Severance Package Possibilities
Most often, severance will be based on how long you have been working at a company, with companies giving one week of severance per year worked at the company. In addition, companies may also extend health benefits through either your provider or through COBRA. Employers may also have a severance clause in your employment contract, which they can lawfully revoke at any time, but this clause might give you a guide as to what your benefits may be.
In addition, there are ways to negotiate your severance package. When negotiating your severance, things you can suggest is payment for your remaining paid time off being added to your severance payment. If you are also an employee in good standing with the company, you can ask for continuation of benefits with your current provider for a longer period of time before enrolling for COBRA or another health insurance provider. In addition, if you think there is a possibility you might be getting laid off soon, it might be advisable to negotiate a severance package and have it specified in writing.