Negotiate and Know Your Severance Package

If you’ve just been laid off, you’re likely in shock, worried, and even numb.

The good news is that, right now, your negotiating power is at its greatest.

Ask for everything you think you are entitled to. Request a few minutes to review the employee handbook, especially the sections on termination, severance pay, vacation pay, and insurance. Ask if you’re eligible for unemployment benefits, and whether the company will be bringing any staff back on a contract basis.

If you have questions, now is the best time to ask them.

Severance Basics

Generally, employees in non-management positions are entitled to one week’s pay for each year of service. Managers and higher-ranked employees may get more. Severance, however, is not legally mandated — it is a courtesy to employees. Your severance may be spelled out in the employee handbook, or you may need to ask about it.

Questions to ask during the severance meeting:

1. What is the severance policy?
2. How much severance pay am I entitled to?
3. Will the company pay for unused vacation and/or sick leave?
4. Am I eligible for COBRA insurance? (This is offered by companies with more than 20 employees and if you were covered under the company’s health plan.)
5. What about life insurance or disability insurance — am I eligible for those benefits after employment ends? For how long? Is there a cost to me?
6. Are the policies transferable?

Resist pressure to sign any exit paperwork immediately. Take time to read it and understand the details. If you think you’re not getting the benefits due to you, contact an employment attorney or advocate. Sometimes they can help you negotiate a better deal.