Understanding critical aspects of responding to severance packages

Nothing is probably as scary as knowing that you have been fired from your job. Given the uncertain economy, it could take a financial toll on your life unless you figure out the next opportunity. If you have an employment contract, your employer may give you a severance package, which you can negotiate. The severance package contains documents concerning your termination along with severance pay and other benefits, and if you don’t understand the details, get legal advice immediately. In this post, we are discussing more information about severance packages.

Knowing severance pay

Your company will offer a severance package if your contract mentions so. The employer is required to pay an amount and additional perks/benefits in exchange for which they may want to get rid of any potential claims you have against the company. If you have been fired without a cause, there is more room for negotiation, although there are exceptions to that.

The severance pay could be a one-time amount, but remember that it could have profound tax implications. If the pay is to be paid over a period of a few months, you should check whether the payments will continue if you are disabled or after your death. Also, what if you get a new job in between? Will your previous employer continue to pay the installments.

Review the employee handbook

Your initial offer letter and the employee handbook can be handy when negotiating the severance package. For instance, if you have unused holidays or other benefits, you may discuss those aspects. You should also read about the Consolidated Omnibus Budget Reconciliation Act of 1995 (COBRA). According to the Act, employees after termination are entitled to get medical/health coverage according to the employer’s plans for up to 18 months after getting fired from the job.

Meet an attorney

Many law firms have ready guides that can offer meaningful and actionable insights on dealing with severance packages. If those don’t seem enough, you may want to meet an employment lawyer who will guide you further and ensure the agreement’s terms and conditions are known to you. If you have an existing claim against your employer, they may use that to negotiate a better deal. Because employment lawyers who work extensively for employees have years of experience, they can offer advice according to specific needs.

Finally, please don’t assume it’s the end of the road. While you deal with the severance package, start looking for jobs.


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