Some New Jersey employees are offered severance packages when they are terminated or laid off from their jobs. Severance pay is meant to lessen the impact of a job loss.
Most employers that offer severance pay will only provide it to employees who lose their jobs as a part of a reduction in force, mass layoff, or because their positions were eliminated. Others might also provide severance pay to employees who agree to retire early or when they are fired without good cause. Here is some information about severance pay from the attorneys at Swartz Swidler.
Are Employers Required to Provide Severance Pay?
There are no legal requirements for employers to offer severance packages. However, when employers have severance pay policies in place, they are required to follow their policies and pay employees who meet the conditions. Some typical requirements for severance package eligibility include working with the company for a set period, losing a job without good cause or through a layoff, remaining with the company to train a replacement, or helping the employer through a transition period such as a merger.
Beyond a severance policy or plan, your employer will be required to pay you severance if you have an employment contract that calls for it, and you meet the contractual requirements. While most employees will not have individual employment contracts containing severance provisions, leading executives often negotiate severance pay provisions to have them included in their contracts.
What to Do if Your Employer Offers a Severance Package to You
If your employer offers a severance package to you, you will likely be asked to sign an agreement in which you waive critical legal rights before your payment will be issued. You should never agree to waive your rights without speaking to an attorney. The lawyers at Swartz Swidler can review the prospective severance agreement and negotiate with your employer to protect your rights and make the agreement more favorable to you. Your attorney can also help you understand all of the provisions in the agreement to ensure that you agree with them before you sign.
How Are Severance Amounts Determined?
If you are entitled to severance pay, the amount that you might expect to receive will depend on your employer’s policies and practices. For example, some employers exercise discretion when determining how much severance pay to give to each employee while others have established amounts based on the duration of the employee’s employment at their companies. For instance, a common way that severance pay is structured is to offer one to two weeks’ worth of salary per year that the employee worked for a company. If your employer has this type of policy, you might expect to receive 20 or 40 weeks’ worth of severance pay if you remained with the company for 20 years, for example.
Can You Negotiate With Your Employer to Secure a Better Severance Package?
If you are negotiating with a prospective employer to secure an employment contract, you might be able to convince the employer to include a severance provision. If you have already lost your job and have received a severance pay offer, it might also be possible to negotiate to receive a better package. Your attorney might negotiate on your behalf to seek additional funds or to get the employer to remove a non-compete clause. in some cases, a lawyer might negotiate more advantageous arrangements, including receiving your severance pay as a lump sum payment instead of receiving periodic payments or agreeing to provide you with a positive job reference.
How to Convince Your Employer to Offer Severance Pay
If your employer has not offered you a severance package, you can still try to negotiate with your employer to receive one. This might be possible in situations in which you have a viable legal claim for retaliation, wrongful termination, or discrimination. In some cases, employers will also agree to offer severance packages to employees who worked at their companies for a long time or when the termination decision was unfair.
Speak to an Experienced Attorney
If you are negotiating a new employment contract with a prospective employer or have been terminated or laid off, you might be able to negotiate a severance package. If you have received a severance offer, you should also have it reviewed by an experienced employment lawyer before you sign an agreement. You need to understand any agreement you are asked to sign so that you can try to get problematic clauses eliminated and potentially negotiate for more compensation and better terms. To learn more, call Swartz Swidler at (856) 685-7420 for a free consultation.
