Check out a snippet from our webinar on solidifying your finances in the event of a layoff and how to negotiate severance!
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Episode Highlights:
- Common Mistakes in Layoff/Severance Situations
- Employees often don’t ask for enough during severance negotiations; documentation of achievements is crucial.
- Employers frequently lack proper documentation to justify terminations or severance decisions.
- Both sides should be prepared: employees should advocate for themselves, and employers should have clear, consistent policies.
- Negotiation is Key
- Everything is negotiable—don’t be afraid to ask for more severance, benefits, or time.
- Employers may have a “cushion” and expect counteroffers.
- Use a list of your contributions to the company as leverage in negotiations.
- Legal Considerations
- Companies are not always required to offer severance unless specified by law (e.g., WARN Act) or contract.
- The WARN Act requires 60 days’ notice (or pay in lieu) for large layoffs, depending on company size and circumstances.
- Consistency in severance offers is important to avoid discrimination claims.
- Practical Steps After a Layoff
- First, take time to process emotionally before responding or negotiating.
- Ask about other open positions within the company before accepting termination.
- Consider negotiating for extended health coverage or other benefits.
- Map out which benefits are portable (e.g., 401k) and which are “use it or lose it” (e.g., FSA, dependent care).
- Employer Best Practices
- Ensure all documentation is in order and policies are applied uniformly to avoid legal issues.
- Have more than one person present during termination meetings to protect against potential claims.
- COBRA and Health Insurance
- Understand your rights to continue health insurance via COBRA and alternatives like the health insurance marketplace.
- Loss of coverage is a qualifying event for marketplace enrollment, even outside open enrollment periods.
- Severance and Indirect Compensation
- Severance may be required if stipulated in a retention or employment agreement.
- Negotiate for acceleration of equity vesting, continued health coverage, or even compensation for lost value due to blackout periods.
- Job placement assistance can be requested as part of a severance package.
- Creative Negotiation Examples
- Real-life stories of negotiating for additional compensation due to unique circumstances (e.g., stock value loss during blackout).
- Don’t hesitate to ask for job placement services or other non-monetary benefits.
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