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Shakespeare wrote that "Parting is such sweet sorrow." But it can certainly be more sorrowful than sweet if you are let go or resign from a company without reasonable recompense. In some cases, you might be offered a severance package, which can include various benefits and pay that's separate from your final paycheck.
U.S. labor laws don't typically obligate employers to pay severance, and you shouldn't expect it if you're being terminated for cause or are a low-level and at-will employee. Many companies, however, offer compensation, and you may even be able to negotiate what's included. Here are tips from experts on how to get the most out of a severance deal.
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1. Read the fine print before signing anything. Sara Austin, an attorney in York, PA., whose practice concentrates on employment law, says that workers in legally protected categories, such as those age 40 or older or people with disabilities, might be offered a severance package in exchange for signing an agreement waiving all legal claims. Before you sign such an agreement, she suggests you carefully comb through the fine print. In addition to describing pay and benefits, it might include a non-compete clause that limits your ability to take a new job.
2. Don't be afraid to negotiate. "Negotiating a severance package the right way can be critical for your future financial health," says Angela Copeland, a Memphis, Tenn.–based career coach and author of Breaking the Rules & Getting the Job. She recommends first taking the agreement home and thinking it over. You usually have a 21-day period in which to review, accept and sign it, or 45 days if you're part of a group termination.
Roberta Matuson, president of Matuson Consulting in Brookline, Mass., suggests asking for more than you think you will get. "The worst that can happen is that your employer says no, but most likely they will say yes or meet you in the middle," says Matuson. Depending on the company's written policy or jurisdiction, some severance packages may not be negotiable.
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