By Severance Pay During Employment Contracts
When you are laid off, a severance package can provide a financial cushion and help you find another job. Severance packages are typically offered to employees in white-collar jobs and managerial positions, and they are often specified in employment contracts or company policies. The higher you are in the organization, the more wiggle room you have to prenegotiate a severance agreement, says business coach John Meintrup. If you are a vice president or director earning a $300,000 salary, for example, you could negotiate for more severance pay up-front than a manager with the same title who makes a smaller salary. Also, candidates who were recruited for a particular position have more leverage than those who applied for the role on their own.
When companies are laying off workers due to COVID, it’s sometimes easier for them to give them a larger severance package than they would otherwise, because it’s easier for the company to justify their actions. In other cases, a company may be unwilling to negotiate a severance package for a high-profile employee, for example.
You can try to convince an employer to increase your severance pay, but you must be prepared for them to say no. A lot of companies are just looking to close the loop and ensure that they don’t get sued for discrimination or retaliation, so they may include a release of claims clause in your severance agreement. It’s important to read the severance package carefully to make sure that it addresses your concerns.
Negotiating Severance Pay During Employment Contracts
The most common components of a severance pay Ontario package are cash payments and health insurance coverage. Laid-off employees often want the company to continue to pay their COBRA health insurance premiums so they can maintain coverage until they find a new job. However, not all employers are obligated to do so, and those that do may only offer a lump-sum payment rather than continuing health care benefits.
Severance packages can also include professional development money, which you can use to attend workshops or pursue a degree related to your field. You can also ask your employer to reimburse you for re-training costs that you incur in finding a new job or moving up the career ladder.
Outplacement services are also a popular part of severance packages, and they can include resume writing and coaching and even job-search assistance from an outside recruiter or company. The severance package should be carefully reviewed to see if it covers your career goals and needs, and you can always seek legal advice if the terms are not clear. You can also consider hiring an employment law attorney to review the agreement before you sign it. They can let you know which state laws govern severance agreements and if there are any stipulations that might prevent you from being able to claim unemployment or file a lawsuit for breach of contract. They can also help you determine whether the severance package is enough to live on while you look for a new job.