In a fluctuating economy, many employees in New York and other parts of the United States will face termination at one point or another. When a person is facing termination, it’s highly important to negotiate a reasonable severance package to protect his or her long-term financial health. This is especially true for employees who already have existing employment agreements.
When negotiating severance agreements, there are many legal and economic factors that should be considered. The intention of severance agreements is to settle any potential disputes that could arise between both parties, and employees should pick their battles when negotiating terms.
Perhaps the biggest issue to negotiate in a severance agreement is pay. Although 6 – 12 months of pay is typical, employees may be able to incentivize employees to increase their initial offers. Employees may also be able to negotiate receiving the severance in a single lump sum up front as opposed to having the payments spread out over time.
Employees should consider negotiating to receive any accrued but unpaid time off within their severance pay. Other important things to negotiate could include continued medical or health coverage benefits and how the company might respond to future reference checks. Alternatively, employees could attempt to obtain recommendation letters from employees prior to negotiating their severance pay benefits.
Federal and state employment laws change frequently, and navigating the process of negotiation severance pay can be complex. An employee who is facing termination should consider consulting with an attorney who specializes in severance agreements. An attorney who understands employment law could help a terminated employee resolve issues related to severance pay and benefits. In many instances, a company may cover all legal fees associated with reviewing and negotiating the severance agreement.