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Assessing the fairness of your job severance agreement

On Behalf of | Dec 21, 2023 | Employment Law |

According to LinkedIn, only 42% of companies use severance agreements when an employee leaves the company. When leaving a job, whether by choice or not, you might receive a severance agreement from your employer. This document often outlines the terms of your departure, including any financial compensation. However, the big question is: Is this severance agreement fair?

Understanding the fairness of a severance agreement is important, as it can significantly impact your financial and professional future.

Evaluate the severance pay

One of the primary aspects of a severance agreement is the severance pay. This is typically a lump sum or a series of payments given to the employee upon leaving. To determine if the pay is fair, consider factors like the length of your employment, your job role and the circumstances of your departure. Compare your offer with industry standards and the employer’s history of severance packages.

Other benefits and terms

Other benefits like extended health insurance, outplacement services or compensation for unused vacation days can add value to your package. Be sure to review these terms. Also, be aware of any restrictive clauses like non-compete or non-disclosure agreements, as these can affect your future employment opportunities.

Negotiate the agreement

If you feel the severance package is not fair, remember that it is often negotiable. You can discuss the terms with your employer, especially if you have a strong case based on your tenure, role or contributions to the company. Negotiating can be a delicate process but can lead to a more favorable outcome.

Determining the fairness of a severance agreement from your job requires careful evaluation of all its terms. Taking the time to understand and negotiate your severance agreement can significantly impact your immediate financial situation and your future career prospects.