Many Employers Offer Severance Packages to Workers to Help Dull the Pain of a Layoff.
There’s often no legal requirement for companies to offer these parting gifts. Still, they serve two essential purposes: helping companies avoid negative press and the potential ire of thousands of resentful workers who air their grievances online.
Another upshot of these exit packages if you’ve been laid off: It may be possible to negotiate an even better severance agreement than initially offered.
Here’s what to know about these agreements, what they often include, and which components are easiest to negotiate
Severance pay
It’s up to companies to decide how to calculate severance pay, but it’s often doled out based on how long workers have been with the firm. The longer your tenure, the juicier your exit package might be. For example, you might receive two to four weeks of pay per year of service.
In a recent mass layoff at Google, workers received 16 weeks of pay plus two weeks for every year of service. If you feel your severance pay does not measure up to how many years of service you contributed to the firm, you could push back and ask for more. Another tactic to consider is asking for your pay upfront in a lump sum versus having it doled out over time.
Accelerated stock vesting
Workers who stand to lose unvested equity after a layoff could push back and ask to be “made whole” somehow. You could ask the company to speed up your vesting period, so you can cash out a portion or all of your stock before you’re terminated. You could also ask for a lump sum cash payment equal to your store’s total or partial value as part of your exit package.
Unused vacation/sick days
Be sure your employer has adequately calculated how many days of unused vacation or sick leave they offer in your package. If it doesn’t align with your record of how many days you’ve used, you could ask for an adjustment.
Job placement assistance
It’s common in mass layoffs for companies to offer job assistance to terminated workers to help them get back on their feet. If your severance package doesn’t include this kind of service, you can request it. These services can match you with specialists or coaches who can help you spruce up your resume and LinkedIn profile and help you find jobs in your interest.
Health benefits
You may be familiar with COBRA, a federal program requiring businesses with 20 or more employees to offer workers the option to temporarily extend their health insurance coverage. COBRA is costly because employers often drop their contribution to your plan, meaning you must foot the bill. If you make a solid case for your employer for why you need continued health care support, they might agree to continue covering their portion of your bill for more time.
Bonus payout
You might have a case for arguing that you deserve at least a partial payout of your annual target bonus — mainly if you can illustrate that you’ve met or exceeded your goals for that point in the year.
Don’t sign the document until you’ve had ample time to review
You might even want to let an attorney review the document with you to point out any concerning clauses — especially if they try to limit your ability to speak about your experience working there or prohibit you from working at competitors.
Success isn’t guaranteed
Go in with realistic expectations before you try to negotiate.
When companies carry out mass layoffs, they will likely be less willing to offer individual workers special accommodations or exceptions to the terms of everyone else’s agreements. If you’re part of a smaller firm or one of the few workers getting the boot, your chances of striking a fantastic deal for yourself might improve.
