employers provide severance pay?
If my employer has a severance plan, do I get benefits?
Does a severance plan have to be in writing?
I have to agree not to sue to receive severance pay. Can they do that?
Why do I have to wait 21 (or 45) days to accept my agreement?
What happens if I ask for a better package?
I do not know what my rights are worth. What should I do?
Are there any "rules of thumb" for how much severance an
employer will pay?
there a law that requires employers to provide severance pay?
No. An employer has no
obligation to provide severance pay. The only benefit that employers
must by law provide is unemployment compensation.
I heard that my employer has a severance
plan. If so, am I entitled to benefits?
If an employer creates a
severance plan, the employees covered by the terms of the plan are
entitled to the benefits that the plan provides upon the occurrence of
the event that triggers benefits. However, an employer may create,
modify or abolish a severance plan as it sees fit. Most employers
choose to have no severance plan at all.
If your employer has a
severance plan, you are entitled to a written summary description of
it. The plan description will tell you what, if anything, you are
entitled to receive.
My company has always paid severance, but now they say they do not
have a severance plan. Do they have a severance plan or not?
Unless it is written, it may be difficult,
though possible, to prove that your employer established a severance
pay plan by providing severance to employees that it has terminated in
the past. You must be able to show such a predictable pattern of
severance benefit payment that you could tell:
- who was eligible for benefits
- when they would become eligible,
- how much they would receive and
- the source of those payments.
Unless the employer has been consistent
in the past, this may be difficult to show.
I have to agree not to sue my
employer in order to receive any severance benefits. Can they do that?
Yes. So long as the
employer writes the plan to condition a release of rights (i.e., a
promise not to sue) on payment of any severance benefits, you must
agree not to sue your employer in order to receive them.
The severance agreement
offered to me gives me 21 (or 45) days to consider it. What does this
mean? Can I accept it before that time?
In order for your promise
not to sue for age discrimination to be enforceable, employers must
give you time to consider any offer. This is designed to prevent
"gun to the head" decisions by employees. As a legal matter
the employer cannot rescind the offer during the waiting period,
giving you time to consider it. However, the waiting period is for
your benefit. Generally speaking, if you want to accept the offer
before the end of the waiting period, you can do so.
What happens to the waiting period if
I ask my employer for a better package?
Technically, once you ask
for a better package you have "rejected" the employers offer
by making a "counteroffer", which the employer can accept or
reject. Therefore, you run the risk of losing the guaranteed offer by
making a counteroffer. However, in practice most employers will not
rescind their offer if you make a counteroffer, but will leave their
original offer on the table if they do not want to negotiate it. To be
clear, though, you must be prepared to lose the offer if you make a
I am inclined to accept the
severance package, but I do not know what, if anything, my rights are
worth that I will be giving up. What should I do?
Consult legal counsel to
evaluate any claims that you may have. Find out what your claims are
worth if you were to win, the chances that you have of winning and the
attorneys' fees and court costs that you will pay in an effort to win.
You should then compare this (plus the aggravation and uncertainty of
litigating) to the benefits offered by your employer.
Are there any "rules of thumb" for how much
severance an employer will pay?
No, but we will offer some
anyways.. Again, an employer has no obligation to provide severance
payments. Employers rarely offer severance pay to hourly
workers. Employers who offer severance will typically
provide one week per year of service to employees below the officer or
executive rank, and up to a month per year of service to executives
and officers. In addition, some severance plans cap benefits at a
specified level, such as one week or month of severance pay for the
first 18 years of employment