One of the most frequent questions we receive from our clients is whether their former employer is required to offer them a severance package or whether they are entitled to a certain amount of severance pay. The answer to both is NO. Unless the former employer has a policy, contract or handbook requiring the payment of severance, the employer is not required to pay the employee any severance. An employer typically offers severance pay in order to have the employee sign a release of all potential claims and to possibly guarantee that the employee does not disparage or compete against the company. These provisions may be included in the severance agreement in many different forms and may be disguised under a “Confidential Information” section. We highly recommend that you contact an employment lawyer before signing a severance agreement.
For more information, read New Jersey Employees Are Not Guaranteed Severance Pay.
Dated: February 6, 2010 – Tom McKinney – Castronovo & McKinney – New Jersey Severance Attorneys