What is a Severance Package?
Some employers offer their employees a severance package consisting of money and benefits when they terminate or lay off an employee. Although not required by many states (including New Jersey and Pennsylvania), severance packages are commonly used when a company lays off employees. A severance package could include payment for unused paid time off, stock options, 401k benefits, recommendations for future employment, and extra pay for scheduled hours or time spent with the company.
Many employee handbooks will contain information regarding the company’s policies on severance packages. Additionally, almost all severance packages include a stipulation that the employee cannot sue the company for wrongful termination by accepting severance. Many employees are unaware that they are signing away their legal rights when accepting severance packages. The severance package lawyers at Zeff Law Firm are experienced with helping workers understand their rights.
Do I Need a Lawyer to Negotiate a Severance Package?
While an individual is allowed to represent their legal interests in severance negotiations, it is generally inadvisable to do so. Employment and severance package contracts can be difficult to understand unless you have a legal background, and many employees are unaware of their legal rights and what they may be entitled to when ending employment with a company. It’s not uncommon for workers to be let go for illegitimate reasons, and then offered severance in order to ensure that the worker cannot sue for wrongful termination. An experienced severance package lawyer, like the attorneys at Zeff Law Firm, can review the severance package you receive to ensure your rights are protected and that you’re receiving a fair deal.
Can an Employer Change a Severance Package?
Unless your employer had you sign an employment contract that specified what you would receive in a severance package, they can change what is included in the package at any point. Furthermore, unless your state requires employers to offer a certain type of severance, an employer can choose to modify or end their severance plan at any point. It’s important for employees to understand their employment contracts and whether or not they include severance pay, as many employers can take advantage of complicated contracts. The severance package attorneys at Zeff Law Firm can help workers understand their employment contracts and what kind of severance benefits they may be owed.
Is it Better to Take a Lump Sum Severance?
Whether a lump sum severance is a better option depends on the individual preferences, as well as what the company is able to afford. With a lump sum payment, all of the money owed to an employee in the severance package is given to them in a large one-time payment. This type of payment usually allows the worker to qualify for unemployment benefits sooner but can be more difficult for smaller businesses to pay all at once. It is also important to remember that severance pay is still income, and thus is taxable. A lump sum payment may have more money withheld for taxes.
If your employer does not offer lump sum severance, they will likely pay out in regular installments. With this type of package, the employee is given scheduled payments over a set course of time (similar to receiving a normal paycheck). These can be easier for a company to afford, however depending on the amount, these continued payments can disqualify the person from receiving unemployment benefits, which may hurt them in the long run. Speak to one of our experienced severance package attorneys at Zeff Law Firm to better understand what your best option might be when considering severance payout.
Can you Negotiate Severance when Laid off?
Negotiating severance isn’t at the forefront of most people’s minds when they’ve been laid off, but it is important to know that you are entitled to time to consider your severance package before accepting it. Legally, you’re allowed 21 days to consult an attorney before you accept the conditions of a severance package. You may be entitled to more forms of payment or benefits that are not included in your severance package, especially if you are tenured or at a higher position in the company. The severance package attorneys at Zeff Law Firm are capable of helping you to understand your severance package and to negotiate better terms.
If you’ve been laid off or fired, you need to act quickly to protect your rights. Contact the severance package lawyers at Zeff Law Firm today to discuss your options regarding severance pay.