No matter where you work, the thought of losing your job is likely something that you dread. If you work for a company that has a labor union, you might receive a severance package if you are laid off or forcibly removed from your job. If you are offered a severance package, it is important for you to review it carefully to make certain that your rights are protected. The attorneys at Swartz Swidler may be able to help you to protect your rights.
What is a severance package?
Severance packages include money and benefits that are given to employees when they are leaving their employers. These packages are meant to temporarily offset the income losses. Employers are not legally required to offer severance packages. However, when there is a labor union that has successfully negotiated severance packages for the union members, the employer will be required to give them. Some other employers that do not have union contracts to provide severance packages may choose to offer them.
What severance packages include
A severance package is not comprised of the employee’s final paycheck. A final paycheck is a payment for the work that the employee performed. Severance pay is additional money for a time after the date of the termination. These packages may include both a monetary amount as well as other benefits.
Severance pay may include commissions, bonuses, deferred compensation and other amounts. The amount that you receive may be based on the number of years that you worked for the company. If you also have rights under an employer-sponsored 401(k) or profit-sharing plan, they will be included in your severance package. Your severance package may also include your ability to liquidate any stock options that you might have and non-financial benefits such as free training and job placement services.
The amount that you might be offered may depend on prior negotiations between your union and the company and what was written in the union contract. If your company does not have a union, there is not a standard amount that your employer must offer. It will also be up to your employer how the money will be paid to you.
Reviewing severance agreements
It is important for you to understand what type of severance package that you might be entitled to if you lose your job. Typically, severance agreements will include the following items:
- The amount of severance money that will be offered
- Other included benefits
- The calculation method that was used
- Payment methodology
- Return of property
- Confidentiality and non-compete agreements
- Covenant not to sue
There may be other things contained in your severance agreement. You should review it carefully so that you do not miss anything. There may be some items contained in the severance agreement that you can negotiate. The attorneys at Swartz Swidler may review your severance agreement before you sign it and negotiate on your behalf to try to secure more favorable terms such as an extension of your disability, life, and health insurance coverage. Your attorney may also look for any non-compete clauses and negotiate their scope as well. Contact Swartz Swidler today to schedule your consultation.