The 8 biggest mistakes of the severance package

June 30, 2021 0 Comments

Severance pay error n. 1

“There is no law that requires severance pay.” True, but then why do all companies pay compensation?

There is no law that says severance pay must be provided, but all companies offer severance pay because the alternative is much worse for them. Keep reading …

Severance pay error n. 2

“I am an at-will employee, so I cannot receive severance.”

At-will employment simply means that you are employed for an unspecified duration, not for a fixed period of time. It means that you can leave at any time and your employer can terminate your employment at any time, but the termination must be for legal reasons and the termination must be done legally! Being in an employment-at-will state, or having an employment-at-will contract, doesn’t mean you can’t get severance pay and a large severance package because you have leverage …

Severance pay error n. 3

“I have no advantage in getting severance pay and I don’t want to ‘burn bridges’ with my company.”

Whether you have been fired for poor performance, laid off, outsourced, or resigned, the company that employs you fears negative publicity, complaints from former employees to board members, the possibility of being sued, and the time and the disruptive costs of litigation, and anyone who speaks ill of the company. Companies want you to walk away calmly and stop any potential controversy. All companies expect to negotiate severance packages in exchange for a Separation and Release Agreement, so not only will you leave on ‘good terms’, but on your own terms too!

Severance pay error n. 4

“My company is bankrupt or they are acquiring it, so there is no compensation.”

Most severance packages are provided when businesses are broke, go bankrupt, or simply cut costs through layoffs. In fact, the severance packages provided during these unfortunate events are often more generous.

Severance pay error n. 5

“My severance package is non-negotiable and must be signed immediately.”

Human Resources and your boss will pressure you to take the check they already cut and sign a release agreement right away. Don’t, as no work situation is “take it or leave it.” Tell them that you need to think about this situation. They will not, and cannot, withdraw the severance offer, even if you ask for more! In fact, there are federal laws that require them to give you three weeks or up to 60 days to consider the settlement, more than enough time to negotiate a better severance package.

Severance pay error n. 6

“I can negotiate a severance package myself.”

People who do this always underestimate their own worth, what your business has provided to others in the past, and what your business will provide them in a severance package. Additionally, they omit compensation, benefits, and legal protections that can be negotiated and must be included in all severance packages.

Severance pay error n. 7

“I can review and understand the legal language within the Claims Release and Separation Agreement that my company wants me to sign in exchange for my severance package.”

All separation and release agreements state that you should consult with an attorney and have the attorney review the release of rights before signing it. This is for your protection as you may not understand or even see the restrictive covenants hidden within the separation / release agreement and within your original employment contract. An experienced employment attorney with human resources experience is better qualified to review a separation / release agreement, not your family or business contracts attorney.

Severance pay error n. 8

“I will hire an attorney to represent me.”

Severance packages are created and implemented by your friendly Human Resources Department. But, if you hire an attorney to represent you to negotiate a severance settlement, your friendly Human Resources Department MUST, and will, turn you and your attorney over to your corporate Legal Department and their attorneys. You will find it difficult to negotiate compensation, as corporate attorneys always take a tough stance against opposing attorneys. Your matter will legally turn into a battle of attorneys. And it is another story if you initiate a lawsuit. The best severance offers come from human resources departments.

To avoid these mistakes, you need both legal and human resources experts on your side to help you get the best compensation package.

Get what you are worth

Get what you’ve earned

Get what you are legally entitled to receive,

Get professional protection – your advantage in labor negotiations.

At Career Protection®, we are on your side to protect your career and your financial future. Get professional protection – your advantage in labor negotiations. ®

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