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Going through job transitions can be difficult, to say the least. Being let go from a job can make this transition even tougher as it might not be expected. Fortunately, there are steps you can take to help make this transition much easier and this can be accomplished, in large part, by successfully negotiating a severance package that meets your needs and protects your rights as you set out on your job search. To help you take on the important, but often daunting task of getting the best you can out of a severance package, here are some tips on how to do so.
Tips for Negotiating Your Severance Package
A severance package is also known as a separation agreement. It is a binding legal agreement established between an employer and a former employee. Generally, it includes financial compensation given to the employee as he or she departs from the company. Oftentimes, a company will provide severance packages when involuntary layoffs are made as the employees being let go did not do anything wrong in leading to the termination of employment. As such, severance packages are often put in place as a gesture of goodwill and to help moderate an employee’s reaction to being laid off.
The good news is that you are negotiating from a position of knowing you will be leaving the company anyway. This can take much of the pressure off of the task. A good severance package, however, can be a real game-changer and so it is important to take this seriously and approach it in a strictly professional manner. One of the best things you can do to come into negotiations from a strong position is to first take a minute to process your feelings about being laid off. Bringing those emotions to the negotiating table can be a big liability and not helpful or productive in negotiating the strongest severance package you can get. Process the layoff, review the company’s initial severance package offer, and take some time to sit with all of this. You may feel the pressure to accept this initial offer and it may very well be that your employer is anxious to get all of this wrapped up. The truth is, however, that strong emotions rarely make for the best negotiations and financial decisions. Take the time you need.
Before approaching your severance package negotiations, learn about what the components of a severance package really are. Yes, there is the cash benefit usually offered. There is also the option of including a provision for compensation for paid time off, like sick leave and vacation days, that you have accrued so far, but never used. There can also be a provision for covering the cost of medical insurance while you are searching for new employment. If you have stock options through this employer and they haven’t fully vested, you can ask for a provision as to when you can exercise such stock options. You can also ask for a provision regarding whether or not you can use this employer as a reference as you look for a new job. Think about your priorities and use your clearly defined goal as a guidepost during negotiations. This will help you avoid being sidetracked by offers that may not serve you or your goals in the long term.
You should also pay particular attention to how the terms of the separation agreement may impact or limit your future job prospects. Is your employer asking you to waive your right to go to work for certain companies? Use this as leverage during negotiations. If you are going to have your job prospects restricted, then you will want to be sure to be properly compensated to weather such restrictions.
New Jersey Employment Law Attorneys
If you are in the midst of severance package negotiations, get professional assistance. The employment law team at Castronovo & McKinney can help you get the best severance package available and protect your employment rights. Contact us today.