Those in middle management positions in the Washington, D.C. metro area may find one day that they are being terminated due to downsizing in a tough economy. When leaving a job, they may be offered a severance package. The following are some things to know if you are leaving your job and are negotiating a severance package.
There is a difference between your last paycheck and a severance package
Your last paycheck covers the compensation you are owed until the date you are terminated. It may also include accrued vacation payouts due and deductions based on federal and state statutes. Depending on company policy, your last paycheck may also include a payout for accrued sick leave or bonus payouts. Severance packages, on the other hand, are payments and benefits issued above and beyond your last paycheck.
What may severance agreements include?
Severance agreements can include a variety of terms. They can include language regarding severance pay and vacation pay. They can also include information on Cobra benefits. Severance agreements can also include terms regarding the return of company property, such as a company vehicle or cellphone. Severance agreements may also include confidentiality agreements and non-compete clauses. In addition, severance agreements may include information on unemployment benefits, along with an agreement not to sue.
Advocating for your needs when reviewing and negotiating severance agreements
It can be challenging to understand what your rights are when reviewing and negotiating a severance agreement. Such agreements should be in line with industry standards, but you will also want to consider how they will affect your finances moving forward. Severance packages are multifaceted contracts, so it is important to seek legal advice before agreeing to one, which this post does not provide.