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Negotiating severance pay

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in Firing,Human Resources

If you’re laid off or terminated, your employer may offer you a severance package. Contrary to popular belief, companies are not required by law to pay severance to permanently laid off or fired employees.

As you prepare to negotiate your severance, consider these points:

Know the policy. A written company policy might set forth a severance formula based on how long you’ve worked there. That’s a starting point, but negotiate for more. Justify your request based on your stellar track record, rainmaking prowess in bringing in profitable accounts or willingness to stick with the company during downturns and previous layoffs.

Weigh lump-sum payment versus salary continuation. Some employers let you choose between these methods, so study which one’s best. Receiving a lump sum gives you immediate cash to pay bills, but staying on the payroll prolongs your benefits. Note that most state laws prohibit unemployment compensation while your salary continues.

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