If you're discharged from your job, your employer might offer a severance package. A severance package typically includes pay and benefits provided to you as a lump sum or over a period of time following your termination.
Employers are not legally required to provide severance packages. But some do. Their decision to do so is not merely to benefit the employee. The employer will also be looking to get something out of the agreement. Many severance packages will contain clauses that prevent the employee from seeking a job with a competitor, speaking negatively about the employer, or pursuing a lawsuit against the company. If you've been offered a severance package, it's important to consider what this means to you and your future, as signing it affects your finances and can limit your rights.
At Nisar Law Group, P.C., we are committed to helping individuals in New York navigate complex employment law matters.
As such, we have compiled a list of five things you should know before you accept a severance package:
- You can take your time: The unexpected loss of your job can leave you financially strapped. If you're offered a severance package, you may be tempted to immediately sign it to ensure you have money while you are looking for a new job. And while we know how important it is to secure your financial future, it's just as important not to rush into an agreement. As mentioned before, you might lose certain rights once you put pen to paper. Also, you could be losing out on a higher severance pay or additional benefits if you sign right away. Give yourself some time to look over what's being offered, but be sure to respond within your given deadline.
- You can review the offer: We hinted at this previously, but it merits its own section. Review the agreement before signing it. You want to ensure you know what you're getting and what you're giving up. You also need to see if your employer has left out compensation or benefits. We recommend going over your severance package with an employment law attorney. They can review every line of the agreement and, having handled similar situations, can let you know whether the offer is fair.
- You can determine whether your termination is unlawful: Under state and federal law, employers are prohibited from making any employment decision – including termination – based on discriminatory reasons. For instance, a company cannot fire someone because of their sex, gender, or race. Additionally, they cannot retaliate against someone who has reported discriminatory or illegal practices within the company. If your termination was unlawful, you might have grounds for a lawsuit against the company. However, if you sign a severance agreement that bars you from taking legal action, this option won't be available. Take note of any situations you encountered on the job that might suggest that you were unjustly let go, and speak with a lawyer about your case before accepting the severance package.
- You may be able to negotiate: You might not have to accept the pay and benefits your employer initially offers in the severance package. You may be able to negotiate for higher amounts or extended insurance coverage. Before you begin talks with your employer, take the time to prepare your arguments. Document the amount of time you were with the company, the contributions you made, and other relevant information that demonstrates the value you brought to your employer. You can also mention potential claims you can bring that can serve as leverage points.
- You can speak with an attorney: We've mentioned this several times in the previous sections, but it's worth bringing up on its own. If you're being offered a severance package, get a knowledgeable attorney to review your situation and the agreement. They can help ensure that your best interests are considered and that your rights are protected.
For the legal counsel you need, contact our experienced attorneys at Nisar Law Group, P.C. by calling (646) 760-6493 today.