What Is Severance Package

September 3rd, 2011

The concept of Severance Package became popular in recent years when the big economies crashed like card castle because of recession. Many employees in various sectors were laid off their jobs. They had to leave their only source of income because of no good reason. The severance package was then introduced to them like a life saviour. In simple words, the Severance package can be defined as the benefits that the employee will get when he leaves the job. In most companies, this provision is offered to those who are laid off or retired but in few sectors the people who resign from their job are also offered this help regardless of their circumstances.

When to Take a Severance Package

September 14th, 2010

Some may call it a legal bribe or selling of employee’s rights but at the same time this fact is undeniable that the Severance package is the life saviour, the only source of income at the time of crises. When any person is laid off from an existing job, his only source of income ceases. He is left with no option to meet his day to day expenses, bear his monthly bills and full fill his family expenses.

The situation become still worst if the lay off employee is bearing some heavy loan like car loan or home loan on his salary. There is no other way to pay off the premiums and then the Severance package appears more like a ray of hope.

If your employer company is merging with any other big company, chances are that you will be laid of.

If you have been working for an organisation for quite a number of years, you must charge them for your expertise and hard work. As you have a real good experience, you will get better job opportunities in no time. You never know, perhaps the competitors have already set their eyes on you and are ready to offer you more that your existing salary. If this is your situation, you must benefit the best of both the worlds.

At the time of employment crises, the severance package may not be a real good deal. In such a scenario the market is as it is short of vacancies. It is really hard to find a new job and if you are a fresher, situation becomes still worst. The severance payment can be helpful but only for few days or months. What will you do after that? On signing the severance document the only hope to fight back your job will also get douse.

Unemployment After Getting A Severance Package

September 14th, 2010

When you are being laid off from your job, availing the “Severance package” is not only the wisest but also the easiest alternative to opt for. You can negotiate the severance package. Therefore you can ask your employer to include certain favourable clauses into the severance agreement according to which the employer company will take care of your major expenses and premiums for a decided period of time. By law, the employer company is liable to bear the life insurance premium and also the health covers of the employee till he gets the entire severance payment.

But how should you precede your job hunt there after? Can you avail the unemployment benefits after getting the severance benefits? When should you apply for the benefits? Should you let the employment people know the exact details about your severance contract? Many such apprehensions and questions are directly associated with Severance package. We shall try to find the answers to all in the below section.

When you file the unemployment, the concerned people are bound to check out your Severance details with your previous employer. Depending upon the state’s law, the department may or may not delay in proffering you unemployment benefits. For instance, in some cases the person is able to avail the benefits within the small period waiting period of two weeks. However, in some states the department issues the unemployment benefit checks only when the severance is schedule to expire.

At your end, you can negotiate your employer company for not disclosing the exact severance package to the department. But seek for this clause only if you really trust your employers. Because many companies do leak out their ex employee’s secrets! And if this happens, you might be charged with heavy tax and penalties. So better be safe. Abide the rules and accept them as they are.

What To Expect In Severance Package

September 7th, 2010

Severance package seems more like a shelter in storm. When you are laid off, you indeed feel devastated. You are left with no job. No money, no future. And then the severance package comes to your way as a knight in shining armour. Most of you must have signed the documents unknowingly that you have actually sold your right to claim! But at that crucial time, there is no other option. But the good news is you can make the only option as the best option.

A normal severance package contains some fixed amount that the company will give you when you will leave the employment. This money includes the unused sick leaves, vacation etc. Depending upon the duration you have served that company, the severance package is offered. Like for instance, if you are just few months old in that organization, the employer may not give you any benefit other than a lump sum amount. However if you have spend a fairly good period in that company, you can expect some thing lucrative.

The good news is, the employer can give you this package only when you are ready to sign it. So, it means you still have your role to play. The employers are quite smart at playing these filthy games. They may tell you that you have a limited period to sign this document. However, the employer company cannot withhold the wages earned by you. Also when you approach them with your plea to negotiate they may give you cold response or something like, “We have never seen this happen”. All that you have to keep in your mind is they are playing with your emotions. They know that you are in need and therefore they are trying to make the most out of that situation.

However, you demand what you deserve. It is good to take a weekly severance payment plan. If you do this you may avail some other benefits for that specific period. For instance, many companies agree to provide you the health cover till the time your severance payment gets over. It is a wise option. This will reduce your premium at that crucial time. Some generous companies also agree upon providing the life insurance cover for that specific period. But for this, you will have to be a good negotiator. What you are asking for is a law. The employer is giving you the bare minimum. But you have always deliver your best when you were working for him. Then why to settle down at bare minimum?

Tell you employer that you expect more. Ask for a written document which says that you will be given the positive recommendation from the employer company. Also take this in writing that once your severance payment is over, the company will not create and hassle in you availing your unemployment benefits. Take a deliberate decision in signing the documents. If at all the employer asks you to sign on the clause that you will never sue them for extra money, never sign that. This is because, in this case there are strong chances that the employer feels they have dismissed you wrongfully. 

Lastly, if you are unconvinced with the reason you were being fired, do not hesitate counselling an attorney. He will make you aware of the pros and cons of that package. Also he may help you in cracking a better deal. It is never too much to ask for in the severance package. So do not feel shy because you are being laid off. Just go for it because you deserve it.

How To Negotiate A Better Severance Package

September 7th, 2010

Never cease your hunt for opportunities. This holds true even when you are offered that pink slip of severance package. So what if you have been laid off you job! You have not committed any crime therefore you have full rights to negotiate for a better package! One thing you should never forget that the Severance Package is your employer’s proposal. He wants you to sign that document, not you. Therefore, the ball is still at your court. You still have the opportunity to crack the best severance package deal.

Know Your Rights

Every employer working in any firm, any industry, any sector and any designation must be aware of their Severance rights. You should be well aware that as an employee what are you liable of and what not. Also you should be well aware of your rights that perhaps you are selling off for just a few dollars. To know them better, you must get in contact with a law person.

How To Proceed Negotiations

The thumb rule that you must not forget while negotiating is; every clause on the document is negotiable! The first step you need to take is, consult a reliable attorney. He may assess the whole document and let you know the flaws of it if any. Also, with his suggestions you can crack a better deal.
In case your employer wants you to sign up the employment document at the time of joining, it is advisable to proceed with the negotiations by yourself directly but in case of this negotiations, the things are little different. When you hire the attorney for getting your severance package assessed, it gives a clear message to the employer that you are serious about it. At times, it becomes really difficult to approach the concerned person to peruse the negotiations. But if you are with an experienced attorney, this becomes easy for you.

If the situation is really bad and you cannot afford an attorney, still you should not loose a hope. There are few points that you should scrutinize the severance package for and must not sign it if at all you find them there. The most important thing that you should keep in mind is that document should not contain any such clause that keeps you refrain from seeking the federal law. It is to be noted that the document offered to you for signature should be nicely assessed by the attorney.

Then give some considerable time to the paperwork. It will be good if you take those documents home for a closer look. Use your calculator. Leave no stone unturned. You can decide whether you want the payments lump sum or weekly. Keep in mind till the point you are receiving the severance payment you won’t be able to seek the unemployment benefits. See what your employer company can offer you as health cover. If you negotiate, you can earn your self a health cover all through your severance period. This will further help you to keep the liabilities low at the time of crises. Be a little more smart. Try to extend your life insurance cover in accordance with your severance period. Last but not the least, you will have to take this in writing from your employer that you will be given positive recommendations. Also, do not forget to take it in writing that your employer company will not challenge your unemployment benefit claims.
The more clauses you manage to get success on, the better is your severance package. So no need to it back and mourn because you have been laid off. Just know your rights and get it from them!

How To Crack A Better Deal

September 7th, 2010

It is always better to consult the attorney before signing the severance agreement. Any genuine company give the employee the time duration of twenty one days to sign the document. This is a fairly good time period where in you can consult the attorney and can also peruse negotiations with your employer. Though this option may seem to be bit costly to some of you, but at least you will become aware of your rights and can make a wise decision. The attorney can also assist you in adding few more clauses in the agreement which are more favourable to you.

Once the document is signed, the employee has very less options to go to the employee court and seek help. But at the same time, there have been cases where even after signing the Severance agreement the employees have sued their employer company and have won. But in such cases you need to have a really strong base to prove that the agreement you signed was under duress and it holds null or void for you and you want to break it. 

Government has given you the rights so that no one can misuse your service. Use them and do not sell them! It is for the benefit of both the employer and the employee.

How safe is Severance Agreement

September 7th, 2010

The Severance policy was made to handle the situation like recession where in the employer is left with no option other than laying off his employees. However, these days the companies are acting smart. They use this policy as a legal bribe to their employee so as to keep them away from using their employee rights. Most of the workforce get allured by the handsome severance payment offered by their employer company and do not realize that their employer has made them signed the document to keep himself free from the enforceability problems.

To imply the Severance policy, the employer needs the employee’s signature. However, there have been such cases quite more than often where the employee was made to sign this document forcibly. The employee is threatened by the owner company that his funds and other payments he is liable to will be withheld if he does not sign the document. Anyhow, no employer is rightful of that. In case you come across any situation where the employer is creating problem in giving the funds that you have already earned you can deal the issue legally.

What Is Severance Agreement

September 7th, 2010

The severance agreement contains the details of the benefits that the employee may attain form the employer company in case his employment gets terminated or he is being laid off. This policy is introduced keeping in minds the mutual benefits. As per its norms, the employee will be supported by the company financially for a period of time so that his monthly funds do not come down to zero. Also, with this support, the employee does not sue the employer company of wrong termination. Neither do he seeks the unemployment compensation form the government. But in other words, the employee takes a legal bribe from his employer for staying refrained from his most vital employee laws.

The terms and conditions specified in the Severance agreement vary as per the industry, sector and the designation of the employer. These policies are included in the employee’s handbook of the company. The payment offered by company majorly depends upon the period the employee has served. For instance, the employee who has served the organisation for more than fifteen years will get more severance payment that the one who is leaving after ten years.

Severance Package Employer Benefits

September 7th, 2010

This policy is not only favourable to the employee but also holds good for the employer. On offering these benefits to the employee after laying him off, chances are less that he will sue the employer company for the wrongful termination. Also he will not knock the doors of the law to seek the unemployment benefits. This way the employer is able to keep him self safe from unfavourable circumstances and the legal notices.

It is to be noted that if you are being laid off it simply means that the employer has a sense of guilt. There was not convincing reason but had no other option. With this mind frame, the employee could be the one who is dominant. Therefore it is better to let the employer know what your demands are. One should not feel shy about that. Rather pursue the negotiations for your severance package. Many employers appreciate proffering the negotiated document. Even if they do not seem to be happy, don’t let your foot down. Remember this is not the time to get emotional.

What Is Included In The Severance Package

September 7th, 2010

The basic idea behind this concept is to help the employee at the time of need. When the employee is laid off, his monthly income ceases all of a sudden. The situation becomes still worst if the employee has a family dependent on him! Many people have faced this awful situation during the time of recession.
However, if the person is on the severance package, he may avail the benefits that will help him to cope up with the ill situation.

For instance, many companies offer an additional payment depending upon the duration the employee has served the company. This extra money may also include the payment for unused vacation or sick leave. Also the employee is given the payment in lieu the notice period. This extra income is always helpful in the time of need. Some industries also cover benefits like stock options, dental, medical insurance etc under this package.

The duration that employee has served the organisation plays a vital role in deciding this extra payment amount. If the employee is working with that firm for over fifteen years, he will receive a whole six months salary. Also he will receive three weeks salary additional for each year of employment. This compensation reduces with the number of serving years.
Though the detailed policies of Severance package are found in each company’s employee’s handbook and may vary depending upon the company norms. But in few countries the Severance package laws are predefined by the respective government. By law, the employer is suppose to give the employee the wages that he has earned. Also all the unused vacation and sick leaves are to be paid back. Not only that, the employer is liable to take care of the health cover of the employee till the time his severance payment is due.

  • Recent Posts