Did you know that you are able to negotiate your severance agreement and possibly get yourself a higher severance package? When a layoff or termination happens many people sign the agreement in front of them because they want to get out of the conversation as soon as possible. As with any agreement, it’s in your best interest to take some time to consider your options before signing a severance document and to push back to see if you can get more.
A recent survey by Lee Hecht Harrison noted that there has been a 10 percent uptick in companies who have an appeals process in place to modify severance offerings. But, even if you work for a company that doesn’t have a formal process, it’s still okay to ask for more.
Here are some details to consider if you are handed a severance agreement. The keys are understanding the options available to you and knowing your priorities. Don’t forget: A typical first step for those facing a severance agreement is to ask for more money. Before you start negotiations, though, find out how much time you have to consider your options, then explore these important factors. Get the answers to the following regarding your severance benefits.
Check the laws in your state and your company policies to be sure that you are receiving the severence pay and unemployment benefits that are at least required. Many states have parameters in place around when you receive your final paycheck and how you are paid out for sick, vacation or personal time. These are not items you should have to ask for, but you should confirm that everything is in order.
A Second Opinion
Don’t underestimate the value of getting outside support because, quite simply, you oftentimes don’t know what you don’t know. Catherine Rhodes, an experienced attorney who specializes in employment law recommends finding an experienced employment lawyer before you need one. Having a trusted advisor whom you already know will give you piece of mind if an issue comes up and allow you to reach a resolution quicker without the added time of meeting and vetting your options. Catherine shares that an experienced and trusted attorney can “advise and steer you from behind the scenes, or to directly interact with your former employer, to remove harmful provisions in the agreement, to improve the severance package, or to modify the agreement. A good attorney will offer you a complimentary consultation, to see if there is any basis for a claim, for retaliation, for example, that you might use as leverage for a higher severance.” I often hear that the cost is a deterrent for many when it comes to speaking with an attorney, but with the option for a free consultation and the potential return on investment, it is probably more approachable than you think. Whomever you choose for your second opinion, an attorney, a trusted mentor, or an experienced colleague, be sure that you run this document by someone to get an outside perspective. You don’t have to go it alone.
What’s on the table for negotiation?
Just like in job offer negotiations, you can haggle over far more than just the dollar amount. Consider asking about the following when you negotiate your severance agreement.
This is typically the first thing that one will look at when facing a severance agreement. Companies’ severance packages are typically related to the number of years you’ve been employed. Most companies’ offerings range from 1 to 4 weeks per year and according to the same survey by Lee Hecht Harrison, over 90% offer 1 to 2 weeks. In other words, a person who has worked for a company for 7 years may get two weeks of severance pay for each year, resulting in 14 weeks of severance. It is okay to ask for more. In fact, if you don’t you may be leaving money on the table. “Provide a calculation,” says Catherine Rhodes, “of how long it will take you to find a new job, or polish or revise your skillset, and present this information as a justification for a higher severance amount.” You can also put a dollar figure on the money you have saved the company or brought in, and use that as justification for a higher than the usual figure.
If continuing your health insurance is a top priority for you, consider asking your company to pay for your COBRA premiums. After your employer stops contributing their portion, premiums can increase by 3 times the amount you’ve been paying, so consider asking for this to be a part of your package. This figure might end up being much higher than a potential payment.
Many say that the best time to look for a job is when you already have one. So why not extend your termination date? You could remain ‘on the books’ at a company after you’ve stopped reporting to work. Although your last day may be June 1, the organization could agree to terminate your employment as of August 1, giving you two months to look for an opportunity while still being able to truthfully say that you are employed. At many companies, insurance ends at the end of the month, so changing your last day of employment from June 30 to July 1 might mean an extra month of benefits, too.
Want to keep your company car, phone or laptop – ask for it! Your equipment is fair game in a negotiation.
Part of your company’s package could be help in finding a new job. There are many firms that partner with companies who are managing a large restructure. If your company doesn’t have those relationships, you can ask for an allowance or reimbursement for career coaching or additional training to find your next job.
If you’re facing a severance agreement, there is usually a lot of concern and questions about the future — especially regarding your company's severance policy. And you'll want answers. Will your severence package be paid in severance payments or as a lump sum? Are there other severance benefits or unemployment benefits invovled? What about all your unused vacation time? If there were other laid-off employees, do you know what kind of severence package each of them received? Have you checked your employment contract for any other important notes about being terminated? You'll need an answer to most of these before you jump to signing any papers.
Remember, though, that your next job is out there, and it’s probably better than the one you’re leaving. Ask for what you deserve and you’ll feel better for having finished strong and seeking what you’re worth. You’ve got this.
Alyson Garrido is passionate about helping women advance their careers and find jobs they will enjoy. As a career coach, she partners with her clients to identify their strengths and create a path toward a more fulfilling career. Alyson provides support around preparing for interviews, performance reviews and salary negotiations, ensuring that you present yourself in the best possible light for job search and career advancement. Learn more or book a session with Alyson by visiting www.alysongarrido.com.