Employees may seek financial protection in case they are terminated without cause. There are many advantages to negotiating severance agreements before or after employment is offered. Severance agreements grant compensation to employees when they are not at fault for their job loss. These situations usually include management changes or poor company performance.
Severance packages contain general terms, although their contents, like other agreements, are subject to negotiation. Severance agreements entered as part of hiring usually provide six to 12 months compensation. Sometimes, there may be up to two years of pay. For severance agreements entered after termination, the standard compensation is one month of severance for each month employed at the company.
Potential employers may offer other terms to make their job offers more attractive. The best time to negotiate a severance package is during the job offer discussions. This allows the parties to agree on what happens upon termination, the circumstances triggering termination and the compensation that will be provided. Negotiations are less stressful because the candidate is not facing job loss.
These agreements may be negotiated after employment begins. However, employees have less leverage because employers are not seeking to attract good hires. Standard terms are usually less advantageous to employees. Seniority and length of service, however, are important components whenever the agreement was negotiated.
An attorney can provide advice on negotiating these agreements and review offers. They may also help protect employee rights after they have been unlawfully terminated. Wrongful termination cases are legally complex and technically complicated. It’s important to speak to an experienced employment law attorney.