Does my job have to give me a severance package?

Does my job have to give me a severance package?

We hope it never happens. Breaking up with a job can be incredibly stressful for both the person leaving the job, as well as their family. With possible delays in unemployment, as well as uncertainty around if someone will receive it, there can be a concern for basic needs and how the family will survive without the income. This is where a severance package can be most helpful.?

Here are a few common questions that we get regarding severance packages:

What is a severance agreement?

A severance package is an agreement between the employer and the individual that outlines the financial terms under which the employee will leave the company once their employment is terminated. It typically includes a standard of one to two weeks of paid salary for every year employed with the company. Once offered, you usually have 21 days to accept it, and once signed there are generally seven days allowed to change your mind.?

Is a severance package negotiable

Every company and every case is different, but if a severance agreement is on the table, then it is usually negotiable. This can mean there is room to prioritize some of the aspects that will best help you or your family during the period of joblessness that may exist prior to finding another job. Common items that are negotiated are a continuation of insurance benefits, assistance finding another job, paid time off usage or payouts, stock options, and accrued vacation pay. In exchange, the employer may want a liability release to protect them from getting sued, or nondisclosure agreements. To get the most out of the severance package, it is often a good idea to consult an attorney as soon as you know your tenure with the company may be coming to an end. This way, you can work with your attorney to understand if you have a case against the employer, or if negotiating a settlement is the best option for you.?

Are severance packages required by law?

No. Severance packages are not required by law, however there are many reasons why a company (usually mid-sized to large) may want to offer a severance package. Some common reasons are:

  • It is an industry standard
  • The packages are used as a talent attraction and recruiting tool
  • It helps guarantee the employee will not help a competitor out
  • It prevents the employee from suing the company (especially if they may have leverage)
  • It makes the employee promise not to make disparaging remarks about the company

Can I still get a severance package if I quit my job?

It is unlikely. Quitting not only prevents you from getting a severance package (unless you negotiate that it looks externally like you quit), but it also precludes you from many of the legal claims and practical leverage you may have for suing the company. This is why it is always better to discuss your departure with an attorney before quitting, since you may be able to instead get a severance package versus walking away with nothing.


If you or someone you know has questions about their ability to sue their employer, or getting a severance package from their current job, reach out to myself or the Liberty Trial Law Group to discuss your options.?

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