Severance Pay
If you are laid off, fired or resigned, your former employer may have the right to provide you with severance pay. Severance pay is often based on the length of your employment and your salary. The amount you receive can be quite substantial. If you decide to accept a severance package, you should carefully review the terms of the deal to ensure that you are receiving what you were promised and what you deserve. You can also consult an experienced severance pay lawyer who can help you negotiate the terms of your agreement.
Typically, severance packages include the following: The most important item on your list is the amount of severance pay you will receive. Generally, you should try to get four weeks of pay for every year you worked at the company. However, senior level employees or those with a higher salary will likely get more. In addition to the monetary compensation, some companies will include other benefits, such as health insurance for a period of time after termination or other employee-related benefits.
You should also ask for a lump sum payment, as opposed to a payout over time. A lump sum allows you to use the money immediately and avoids the possibility of a problem arising in the future that could disrupt your payments. You should also determine if your severance package includes outplacement services to assist you with finding a new job. These can range from resume writing and interview coaching to networking meetings with potential employers. Many professionals decline these additional offerings, preferring to use their severance pay to start their search for a new position.
How to Do Severance Pay
If you decide to accept a severance pay lawyer package, be sure you understand the tax implications of it. Severance pay is taxable as regular income, and the amount you receive can be enough to put you into a higher federal income tax bracket. It can also impact your state taxes and credits, depending on where you live. To avoid these issues, you should consult a tax professional and discuss your situation with them before accepting a severance pay package.
Severance packages can vary widely, and you should make an effort to determine what is typically offered in your industry. You can do this by looking at online surveys of severance pay or asking friends who have left their jobs for the company how much they received. You can also look at comparable offers from competitors to help you decide on a number to request from your employer.
You should also be aware that your acceptance of severance pay will likely result in waivers of the company’s legal rights to sue you for discrimination or wrongful termination. Be very careful to only accept a severance pay package that fully compensates you for your years of service and does not limit your ability to file a lawsuit against the company if you are wrongfully terminated. You can also contact a severance pay lawyer to discuss your options for bringing a private lawsuit.