Severance Pay Tips

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When your job ends, there are a few key things to focus on as you leave.

Severance Package

Severance pay is not required by law, but some companies provide severance pay because it makes the transition easier for them.   Some companies obligate themselves to provide severance packages by promising severance in an employment contract or a company manual or handbook.  

 If you are offerred a severance package, here are the things to look for:

• Severance Pay.  There is no formula for severance pay and the amount is driven by various factors.   If your termination is routine or part of a downsizing, you will probably be offerred a predetermined standard pacakge that will be difficult to alter.   However, if your termination is based on potentially unlawful conduct such as employment discrimination, retaliation or sexual harassment, you may be in a better position to negotiate more severance pay.  Also, try to include dates for the severance pay and a date for your final paycheck.  
• Promise Not to Contest Unemployment Benefits.   Ask your employer to include a written promise not to contest your claim for unemployment benefits.  This should prevent them from challenging your claim for unemployment benefits.   
• Health Insurance Coverage.  You have the right to keep the same health insurance after your employment is terminated, but you are required to pay the premiums.  You can ask your employer to continue making the health insurance premiums for several more months. 
  
• Letter of Reference.  If your relationship with your employer has been challenging, you should try to negotiate a letter of reference to make sure that you have a positive reference.