If an employee is presented with a severance agreement, his or her first instinct might be just to sign it and move on to another job. However, there may be an opportunity to negotiate the terms of the severance agreement in his or her favor first.
An organization may offer a severance agreement to an employee who is departing. It may be offered to recognize his or her service, to provide support to terminated employees or to prevent a future lawsuit.
It often outlines financial terms, such as payment of the employee’s salary for a period of time. Many times, severance pay is equal to one to two weeks of compensation for every year the employee worked, but for higher level positions, it may be more.
While the severance agreement may not initially include items like continued health insurance coverage, career assistance and other benefits, the employee should feel empowered to ask for these. For example, the employee may want to ask the employer to cover his or her health insurance until the employee finds a new job or to pay for placement with a service that can help him or her find future employment.
The employee may also want the severance agreement to include information about how to access his or her retirement benefits or pension plan, if applicable.
It’s important that a severance agreement is negotiated properly. If an employee would like assistance to review the terms of the agreement, an experienced employment law attorney can help.