The 8 Biggest Mistakes in the Severance Package

Severance Payment Mistake #1

“There is no law that requires severance pay.” True, but then why do all companies pay compensation?

There is no law stating that severance pay must be provided, but all companies provide severance pay because the alternative is much worse for them. Keep reading…

Severance payment error #2

“I am an at-will employee, so I cannot receive severance pay.”

At-will employment simply means that you are employed for an unreported duration, not for a fixed period of time. It means that you can leave at any time and your employer can terminate your employment at any time, but the termination must be for legal reasons and the dismissal must be done legally! Being in an at-will employment status, or having an at-will employment contract, doesn’t mean you can’t get severance pay and a great severance package because you have leverage…

Severance payment error #3

“I have no clout to get severance pay and I don’t want to ‘burn bridges’ with my company.”

Whether you’ve been terminated for poor performance, laid off, outsourced, or resigned, your employing company fears negative publicity, complaints from former employees to board members, the possibility of being sued, and damaging time and expense. litigation, and anyone who speaks ill of the company. Companies want you to go quietly and stop any possible controversy. All companies expect to negotiate severance packages in exchange for a Separation and Release Agreement, so you will leave not only on ‘good terms’, but also on your own terms!

Severance Payment Mistake #4

“My company is in bankruptcy or is being acquired, so there is no severance payment.”

Most severance packages are provided when companies are out of money, go bankrupt, or simply cut costs by laying off workers. In fact, the severance packages provided during these unfortunate events are often more generous.

Severance Payment Mistake #5

“My severance package is non-negotiable and must be signed immediately.”

Human Resources and your boss will pressure you to take the check they’ve already cut and sign a release agreement right away. Don’t do it as no work situation is ‘take it or leave it’. Tell them you have to think about this situation. They will not and cannot withdraw the severance offer, even if you ask for more! In fact, there are federal laws that require you to be given three weeks or up to 60 days to consider the settlement, which is more than enough time to negotiate a better severance package.

Severance Payment Mistake #6

“I can negotiate a severance package on my own.”

People who do this always underestimate their own value, what their company has provided in the past to others, and what their company will provide them in a severance package. In addition, they leave out compensation, benefits, and legal protections that can be negotiated and must be included in all severance packages.

Severance Payment Mistake #7

“I can review and understand the legal language within the Separation and Release of Claims Agreement that my company wants me to sign in exchange for my severance package.”

All separation and release agreements state that you must consult with an attorney and have the attorney review the release of rights before you sign it. This is for your protection, as you may not understand or even see the restrictive covenants hidden within the separation/release agreement and within your original employment contract. An experienced employment attorney with human resources experience is best qualified to review a separation/release agreement, not your family or business contract attorney.

Severance Payment Mistake #8

“I will hire an attorney to represent me.”

Severance pay packages are created and implemented by your friendly Human Resources Department. But, if you hire an attorney to represent you in negotiating a severance agreement, your kind Human Resources Department SHOULD, and will, turn you and your attorney over to your corporate Legal Department and your attorneys. You will have a hard time negotiating compensation, as corporate attorneys always take a tough stance against opposing attorneys. Your matter will be legally escalated to a battle of lawyers. And, it’s another story if you start a lawsuit. The best severance offers come from human resources departments.

To avoid these mistakes, you need legal AND human resource experts on your side to help you get the best severance package.

Get what you’re worth

Get what you’ve earned

Get what you are legally entitled to receive,

Get Career Protection – your advantage in employment negotiations.

At Career Protection®, we’re on your side to protect your career and financial future. Get Career Protection – your advantage in employment negotiations. ®

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