How Do I Know If a Severance Package is Fair?

Leaving a company is never easy. The transition period can be challenging. A severance package can help to ease some of the burden. If you are leaving your employer, you may be wondering: Is the severance package I am being offered a fair deal? As severance pay is not guaranteed by law in Florida, these agreements are highly case-specific. In this article, you will find an overview of key considerations for determining if a severance package is fair.

Consideration #1: How Long Were You at the Company? 

As a starting point, the length of your employment is likely to play a key role in determining whether a severance package is fair. Most employers that offer severance pay will base the amount, at least in part, on tenure. Typically employers will offer a certain number of weeks of salary for each year of service. If you have been with the company for several years, your severance should generally reflect that commitment. If the severance does not seem proportional to your years of service, you may be able to negotiate for a more favorable agreement.

 Consideration #2: Do You Have Any Potential Claims Against Your Former Employer? 

Why do employers offer severance? After all, they are not required to by law. A key reason is that employees will almost always be required to sign a release of claims against the employer when they accept severance. Before accepting the offer, evaluate whether you have potential legal claims—such as discrimination, wrongful termination, unpaid wages, or retaliation. If you do, your employer may be offering severance to avoid liability. If you have a strong potential claim, it is imperative that you consult with a lawyer. You can seek additional compensation.

 Consideration #3: What Have Other Co-Workers Been Offered? 

If other employees were recently laid off, it is useful to compare your severance package to what they have been offered. In many cases, companies often follow standard severance policies—and that means that discrepancies may suggest unfair treatment. If co-workers with similar roles and tenure received better terms, you may have grounds to negotiate for pay. Additionally, if your employer is offering you less because they expect you to accept it without question, pushing back could lead to a better outcome.

Consideration #4: Does the Agreement Provide for Any Non-Cash Benefits? 

Severance packages are generally based around additional weeks of pay for the departing employee. However, an agreement could include other types of benefits as well. You should consider whether your agreement provides extended health insurance coverage, outplacement services, stock options, accelerated vesting of retirement benefits, or even a positive letter of recommendation.

 Get Help From a Florida Severance Agreement Lawyer Today 

Are you leaving a company? Do you have questions about a proposed severance package? You are certainly not alone. It is crucial that you get a fair agreement. An experienced Florida employment lawyer can review the proposed severance package and help you understand your options.