Severance Pay & Severance
A severance package is pay and benefits that you may be offered when you are fired or laid off from a company. Some companies are required to provide severance packages in the case of large-scale or prolonged layoffs, while others simply choose to do so as a way of helping employees through this difficult transition. Regardless of whether severance packages are mandatory or optional, they are often an effective tool for employers to keep the morale of their remaining workforce intact and prevent negative word-of-mouth from being spread.
While it is generally possible to negotiate a severance pay during the hiring process, you can also negotiate it at any time after being terminated. Often, the amount of severance that you will be offered is based on how long you worked for the company and your position within the organization.
Depending on your individual situation, you may be able to negotiate for more pay, outplacement assistance services or other compensation elements. However, you should remember that your severance package is still subject to tax. In addition, if your severance package includes unused vacation and sick days that have not been cashing in, you will be taxed on those amounts as well.
Severance packages can include a combination of pay and other benefits, including health insurance, which is sometimes paid on a COBRA basis for a certain period of time. In addition, some companies will agree to waive their right to contest your unemployment claim if you are let go.
Severance Pay & Severance Packages
It is important to review a severance package carefully before you accept it. You should ensure that you receive all the compensation you are entitled to, as well as any other benefits that have been promised. You should also determine if your employer has included all of the items that are part of the standard severance package in your industry, and whether it is paying you in a lump sum or over a specified period.
If you are over 40 years old, you have 21-days to review your severance agreement under New York law. If you are laid off as part of a mass layoff, you will typically have 45-days to consider the offer.
The most common component of a severance package is pay. This is usually based on the number of years you have worked at the company and can be anywhere from a week’s worth of pay to several weeks’ worth of pay per year. Middle managers and executives typically receive a higher amount than entry-level workers. A severance package can also include unused vacation and sick days that have not yet been cashed in, as well as unreimbursed business expenses.
You may be able to negotiate these amounts, but it is critical to have an experienced New York how to get severance pay attorney review the terms and conditions of the severance agreement before you sign. An experienced lawyer can also help you understand your rights regarding a release of liability, which will prevent you from filing a lawsuit against the former employer.