If you have been laid off, or you suspect layoffs are around the corner, it’s important to know that you can negotiate a better severance package at any point during your employment. Such a package can help sustain you while you look for another job. Whether you have been offered a severance package or simply want to negotiate a better exit package preemptively, here is our guide to asking for more severance:
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- You can always try to negotiate more severance. Employers rarely withdraw an offer just because an employee asks for more.
- A reasonable severance package should meet your needs while you look for comparable employment.
- You should be given a reasonable amount of time to review and decide whether you want to accept a severance offer. Some laws require a minimum of 21-45 days to review a severance offer.
- Do your research before negotiating. Consider what other employees have received as a severance and consider how long you may be looking for other employment.
- Remember that you can negotiate benefits such as continued health insurance and assistance finding a new job in addition to severance payments.
- Consider consulting with an employee rights attorney to ensure a severance package serves your best interests.
At Jackson Spencer Law, we have many years of experience negotiating severance agreements, so we are confident that we can help employees negotiate solid severance packages.
In this post, we will discuss what a reasonable severance package entails and how you can enhance your bargaining position. Let’s start by answering the question we are frequently asked by clients: “Is it even possible to get more severance?”
Can You Get More?
The amount of severance offered is typically linked to how long you have been working for your employer. There is, however, almost always room for negotiation. Even if you are not interested in negotiating more severance, you can negotiate the details of your severance package, such as whether you are paid in installments or a lump sum. Of course, you will want to take into consideration whether a lump sum severance will push you into a higher tax bracket. If so, it may be wise to spread the payments out over two years to avoid the extra taxation.
What is a Reasonable Severance Package?
Reasonable severance packages vary based on the company you work for, how long you have worked for them, and your role as an employee. Middle managers and executives, for instance, usually receive a better severance package than other employees. Some executives have been known to walk out with what we will call 24 Karat Golden Parachutes, multi-million-dollar deals or more than a year of severance pay. Ultimately, a reasonable severance package is one that meets your needs while you look for other gainful employment.
While many companies offer 1-2 weeks of severance pay for every year worked, you can ask for more. A good rule of thumb is to request 4 weeks of severance pay for each year worked. However, other benefits, like continued health insurance, may be more important to you. So, keep in mind that severance payments are not the only component of a severance package you can negotiate.
Either way, know that you can (and should) take your time when reviewing or accepting a severance offer from your employer. If you are over 40, the Older Workers Benefit Protection Act (OWBPA) requires a 21-day consideration period. If you are included in a group of employees being laid off from the same company, you are to be provided 45 days to review a severance offer. Even if the OWBPA does not apply in your situation, you should not rush to sign a severance agreement without a careful review. If your employer pushes you to sign an agreement without a reasonable amount of time to review its details, this is a red flag.
Preparing for Negotiation
Always come to the table prepared; know what you need and what you would like to negotiate. Reading articles like this is a good start because it is important to know your rights. Also feel free to ask around: What have other employees been offered in their severance packages? You may also want to speak with local recruitment and placement agencies about how long it takes employees with experience similar to yours to find a new job. If jobseekers with a background like yours typically take 8 weeks to find a new, comparable position, consider asking for a severance that will sustain you for that time period.
While many employees do not think about severance until they hear rumors or there are mass layoffs, you can negotiate severance at any time during your employment. The best times to think about a potential severance are when you are hired and as soon as you discover layoffs or terminations are around the corner. And remember that money is not the only thing on the table for severance packages; you can negotiate health insurance benefits, assistance finding another job, and other perks associated with your role.
What You Can Bring to the Table to Enhance Your Severance Package
Understand that you actually have bargaining power when it comes to negotiating severance. Most companies offer severance in exchange for waiving your right to sue, compete with, or disclose information about your employer. Any rights you are giving up can be used as leverage to negotiate a severance that works for you.
If you believe you have been discriminated against or think you may have claims against your employer, you should consult with an employment attorney before signing any waivers. You will want to carefully weigh the rights you are giving up with your severance offer, because some offers may not be worth surrendering your legal rights.
Jackson Spencer Attorneys Can Review and Negotiate a Better Severance
The employee rights attorneys at Jackson Spencer Law have years of experience negotiating severance packages. Whether you want an attorney to simply review a severance offer or need the assistance of an experienced negotiator, we can help. Together we can determine if the terms of your severance package should be changed or if you could potentially increase your severance. We will also help you decide whether any waivers your employer wants you to sign are in your best interest.
We offer free consultations, without obligation. We can often negotiate severance packages, at no cost to you unless we obtain an increase over the amount you were initially offered. To schedule a free consultation, contact us at 877-239-6274 or complete our online contact form