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Employment Severance Pay Overview

Severance pay is a contractual agreement negotiated between the employer and the discharged employee that entitles the employee to certain benefits or considerations. The Fair Labor Standards Act (FLSA) does not require an employer to offer an employee severance pay upon termination of their employment. In fact, the only benefit that the law requires employers to provide to discharged employees is unemployment compensation. An employer retains the right to create, modify, or abolish a severance plan at-will, and many employers do not offer their employees a severance plan. When an employer offers severance pay to an employee, the employee agrees not to sue the employer for wrongful termination or any other related legal claims by accepting the severance pay. Obtaining severance pay can be complicated; therefore, hiring severance pay attorneys for expert legal guidance will be invaluable.

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Things to Consider When Negotiating Severance Pay

Because severance pay is designed to protect the financial interests of the discharged employee, it will be essential for the employee to ensure the severance pay agreement provides them with adequate compensation. Additionally, when employees are negotiating severance pay, they will want to be certain that they obtain a release of rights from their employer. This release of rights will protect the employee from any harmful claims of wrongful behavior or harassment the employer might bring against the employee. The conditions of severance pay should be worded carefully to avoid any potential appearance of discrimination. If the severance pay negotiated is deemed to be inadequate, the employee can reject the severance pay and retain the right to sue the employer for wrongful termination. For assistance negotiating acceptable severance pay terms and conditions, employees may retain the services of experienced and skilled severance pay lawyers.

Making a Severance Pay Counteroffer

If an employee rejects an employer's severance pay offer by asking for additional benefits, the employee has in effect made a counteroffer. As this point, the employer may reject the employee's counteroffer. When this occurs, the employee will have lost the right to any guaranteed severance pay offer the employer made. Before making a counteroffer, it may be wise for the employee to speak with severance pay lawyers. Having an objective third party to review any severance pay offers is always beneficial and can provide employees with the understanding they need to make a well-informed decision.

Contacting a Severance Pay Attorney

Attorneys at severance pay law firms understand that several factors affect the terms of an employee's severance pay. Factors such as the employee's tenure, the circumstances surrounding the employee's discharge, and the financial condition of the employer will all impact the amount of severance pay offered. Severance pay attorneys can help employees evaluate their case and determine if accepting the severance pay offered is right for them. In some cases, moving forward with a wrongful termination or other legal claim may be more beneficial for the employee. The lawyers at severance pay law firms will make the best interests of the employee their top priority. When employees need help negotiating severance pay or determining whether to accept the severance pay offered, they are strongly urged to seek legal counsel before making any decisions.

Do you have additional legal questions about employment law? Our employment law attorneys can help! Contact an employment lawyer today!

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