Receiving a layoff notice can be a daunting experience, even for high-level executives. One of the first questions that could come to your mind is whether you are eligible for severance pay.
However, severance pay is not always a guarantee. Your employment contract may include provisions that affect your eligibility for it. Here are four key provisions to look out for:
- Severance triggers: These provisions outline the events that trigger severance pay, such as a reduction in force, termination without cause or resignation for good reason.
- Severance amount: This provision outlines the amount of severance pay that you are eligible for, which may be based on your salary, length of service or other factors.
- Release and waiver: This provision requires you to sign a release and waiver of claims against your employer in exchange for severance pay.
- Non-compete and non-solicitation clauses: These provisions may affect your ability to work for a competitor or start your own business, which can impact your severance pay.
It is essential to carefully review your employment contract to understand how these provisions affect your severance pay. For instance, if your contract includes a severance trigger provision, you may be eligible to receive severance pay only if the company terminates your contract without cause, which includes restructuring or cost cutting. If you resign, you may not be eligible for severance pay.
Empowering yourself for a better severance agreement
Being laid off can be disheartening, but know that it does not mean a failure – it is a business decision that is out of your control. If you find yourself in this situation, know that you are not alone. You can reach out to an experienced employment law attorney who can help you manage the process while protecting your interests.
By understanding your employment contract and knowing your rights, you can negotiate for a fairer and better severance package.