severance pay: who gets it and how it works

If you’ve been fired or laid off, you might have been offered severance pay — or you might be wondering if you can negotiate for it if you leave your job. But being terminated or leaving a job can be a stressful time, and you might not know how to take full advantage of your options. Here’s a guide to severance pay — how it works, who gets it, and more.

What is severance pay?

Severance pay is a payment or series of payments that an employer might offer when it lays off or fires an employee. It could also include the continuation of your health-care benefits for a certain period of time.

Why do companies offer severance pay?

Companies offer severance so that your income won’t disappear overnight — which is good for you, but also good for the company from a PR standpoint. Severance can also help the morale of employees who remain, since they’ll know that the company is trying to cushion the impact your termination has on you financially. It’s in the company’s best interests not to appear coldhearted to its remaining workforce.

There’s something else in it for the company, too: In exchange for severance, you’ll almost always need to sign what’s known as a “general release,” a legal document releasing the company from any future legal claims. In other words, to receive the severance, you’ll need to agree that you won’t sue them over something like discrimination or harassment in the future.

Is severance pay required by law?

No. Severance pay is up to the company’s discretion, unless you have a contract that requires it.

However, if your company has more than 100 employees and is laying off at least 50 people, the federal W.A.R.N. Act requires it to provide workers with at least 60 days’ notice of the impending layoff. If it doesn’t do that, the law requires it to pay you for up to 60 days after the layoff.

How much severance pay is typical?

It depends! Different companies offer different amounts. The most common model is to use a formula based on your salary and how long you’ve worked there. For example, a company might offer two weeks’ salary for every year you’ve been there — so if you’ve worked there four years, you’d be offered eight weeks of salary. One or two weeks of salary per year of employment is typical — but some companies offer more and some less.

Under what circumstances might you be offered severance pay?

Most commonly, you’ll be offered severance if you’re being laid off — meaning that your job is being eliminated.

But in some cases you might be offered severance if you’re being fired for performance reasons. That’s much less common, but it does happen — and your chances go up if (a) the company believes you made a good-faith effort but the job wasn’t the right fit; (b) the job changed after you were hired, so the company sees that it’s not your “fault” that it didn’t work out; or (c) the problems were strictly performance-related and not about conduct. You might also be offered severance when being fired if the company has some reason for wanting you to sign that release of legal claims — like if it worries you have grounds to sue over something that happened during your employment. (That’s true even if it believes it followed the law and would ultimately prevail in a lawsuit; companies often prefer to pay severance to ensure they don’t have to spend resources fighting a legal battle.)

Can you get severance pay when you quit?

Typically, no. Severance is usually for employees who are being let go involuntarily.

However, there are some exceptions to this. If it’s clear that your work isn’t going well but your employer prefers not to fire you, you might be able to negotiate an exit that includes severance. Or, if you believe you have a legal claim against your employer, you might be able to negotiate a departure that includes severance in exchange for signing a release of claims. In most cases, though, severance isn’t given to employees who voluntarily resign.

Can you negotiate for more severance pay?

Yes! Well, sometimes. It’s generally reasonable to try, and you might get it.

In negotiating for more, think about any factors that might sway the company in your favor. For example, maybe your manager persuaded you to turn down a job at a different company earlier this year, and you can argue that your severance should be increased because your loyalty to the company is leaving you unemployed now. Or maybe you moved for the job just six months ago, taking the company at its word that it’d have long-term work for you. The people you’re negotiating with are human and can sometimes be swayed by arguments about fairness or ethics.

And remember, you can negotiate for more than just a higher payout. You can negotiate to be paid for unused vacation and sick days, having the company cover your health-insurance premiums for longer, or even keeping your company laptop.

Do you have to sign on the spot?

No! Ask how much time you have to decide whether or not to accept the severance package. Typically, you’ll be given a few days or even a few weeks to review the offer. (If you’re over 40 years old, federal law requires that you be given at least 21 days.)

So don’t sign on the spot. Take the agreement home, read it carefully, and give real thought to the rights you’d be giving up. It some cases it will make sense to talk to a lawyer — especially if you think you have legal claims against the company, or if you’re being asked to sign a noncompete that would limit what other types of work you can accept after you depart. A lawyer can advise you on whether to sign and can also help you negotiate a better package.

Originally published at New York Magazine.

{ 87 comments… read them below }

  1. ragazza*

    Wish I had known about negotiating before I got laid off in July! I got a pretty good deal anyway though.

    1. Fortitude Jones*

      Yeah, I was just thinking that about a job I had almost 10 years ago that offered me two weeks of severance. Although, the two weeks itself were generous given that I had only worked there for four months, so maybe I had no more cards to play there.

    2. A Bag of Jedi Mind Tricks*

      Yeah. When I was laid off 8 years ago, I wish I’d known I could have negotiated for more severance pay.

  2. JennyFair*

    “You might also be offered severance when being fired if the company has some reason for wanting you to sign that release of legal claims — like if it worries you have grounds to sue over something that happened during your employment.”

    Yeah, when there was hubbub over a former employer and their working conditions and practices, I saw people saying ‘If that was true we’d have heard from ex employees!’ and I couldn’t say anything…and knew they couldn’t, either. I wonder how often gag orders are demanded in exchange for severance packages.

    1. SB*

      I “know of” a company that habitually offers anyone on a PIP significant severance to quit on the spot with (I believe) the idea that this reduces legal danger and simplifies matters for everyone.

    2. Pay No Attention To The Man Behind The Curtain*

      I imagine liability release documents and non-disclosure documents have just become SOP even if they don’t expect there to be a lawsuit in each specific case. Offering severance just incentivizes someone to sign them, but often companies will try to claim that employees MUST sign them the same way employees must hand in their keys/badge/company equipment, etc.

      1. Natalie*

        It’s more than incentive. As far as I understand, contracts have to have consideration (that is, something of value) for each party. A worker signing a general release without severance is receiving no consideration so the release may not be enforceable.

        1. Devil Fish*

          I’m fairly certain a lot of the legal documents I’ve signed in the course of my employment history haven’t been enforceable (f’rex: the 2 year non-compete agreement when I was hired as a line cook, the document assigning any IP I created in my off-hours to my employer when I was hired at a call center, etc), but the point seems to be convincing workers that they signed away their right to sue rather than actually having an enforceable agreement. And if you don’t sign the documents, you can just gtfo and find a different job, so most people sign. It really sucks.

          One place had us sign a document agreeing that we would never attempt to collect unemployment under any circumstances. People rarely tried to collect, and when they did they usually dropped it after they were sent a copy of the document they’d signed. Even though I’m pretty sure that wasn’t legal at all.

    3. De Minimis*

      I was fired from a job a while back and got some severance, I’m assuming this may have been why. I was a member of a protected class, and they also may have wanted to avoid bad publicity [they were in the process of letting a lot of people go over the following months, most of whom started the year before–they hired a lot of new grads and might not have wanted it to get back to their feeder schools that new hires were being let go.]

      There were layoffs at a previous job and they had a section in the severance agreement about “disparagement,” along with the general release of claims. People are really over a barrel most of the time, it’s not like they can usually afford to do without the severance.

    4. Gaia*

      Mine thought they had me sign an NDA. Boy were they surprised when that turned out to not be the form I signed.

    5. Audiophile*

      In all of my layoffs, I don’t think I’ve ever been asked to sign any documents in exchange for severance. In most cases, I’ve been handed a piece of paper with the terms or it’s been mailed to me, but no one has required me to sign anything.

  3. MsMaryMary*

    I want to highlight the possibility of negotiating continued health benefits into your severance. Premiums on the individual market are high, and COBRA costs a fortune. Seeing if your former employer will let you continuing paying your usual employee contributions instead of the full COBRA premium could put thousands of dollars back in your pocket. If you’ve already met your deductible or out of pocket for that year, it would save you even more money.

    The period of time you continue health benefits doesn’t have to match the amount of time your severance pay would last. Asking for a month or two or through the end of the year is perfectly reasonable.

    1. Anooooooon for This*

      Although this is a pretty common practice, there are actually lots of laws that make it problematic. While it doesn’t hurt to ask for, I wouldn’t be surprised if the employer said no.

    2. Jilly*

      I’ve been laid off twice and both times the offered severance package included them paying 3 months of COBRA. The first time I was laid off I left work on a Friday and started new job on a Monday (I was notified that I was being laid off in early December but my last day was in late January) but the new job had crappy health insurance so I used the full 3 months of COBRA before switching to the new job’s insurance and luckily by the time open enrollment rolled around again, they had a new health insurance plan. Second time I was laid off, was the end of September so COBRA through the calendar year and then in the new year I got a good plan off the state exchange for $300/mo. Started a new job in May but wasn’t eligible for their insurance until June 1. Giant issue was that I had a very very expensive testing procedure scheduled for Oct 4 (a Monday) and my COBRA paperwork was still being processed though it was always going to be retroactively effective on Oct 1. So I had to pay out pocket day of and then eventually the COBRA paid the provider and I had to fight with the provider for about 5 months to get them to cut me a refund check. Luckily I had a 6-month loss of income fund set aside plus the 2.5 months of severance and 10 days of vacation pay out.

      1. Anon For This*

        My annual contract (common in my industry) was not renewed, and I was pressured to resign before the end of the contract, “so we can move forward.” I argued that leaving early was in their best interests, not mine, so I wanted some severance. They would still pay out the end of my contract, and I had a choice of:
        1 month’s salary and paying my COBRA insurance premiums through the end of the calendar year
        2 months’ salary

        I did the math (and did I ever need the insurance at the time) and took offer #1. This cost the former employer more than two months salary, as the new employer’s insurance didn’t kick in until nine months later.

        TL;DR: Alison is exactly right–negotiate for any and all possible benefits in severance.

    3. Pay No Attention To The Man Behind The Curtain*

      +1 I worked at a place that laid off a woman who was about 6-7 months pregnant. They eliminated her position and she didn’t have any performance or conduct issues so they offered her health insurance coverage for the remainder of her pregnancy (I think that was all the “severance” they offered). But this was a small privately-owned company with super basic minimum health insurance, so I think it was easier for them to arrange it. It may be much more difficult for a large company with complex health benefits and negotiated contracts. I wonder if extending health insurance complicates unemployment insurance claims at all. Does it count as income?

    4. Southern Living*

      I did this. I framed it as, add an additional x amount to my severance which is equal to x amount of employer contribution for x months of my health insurance. I didn’t ask for the employee portion – only that which the employer had been paying for. And then it is up to you, in good faith, that you will use it for your COBRA premium – but it comes to you as part of your last paycheck (or severance check, if sent differently) and then it’s up to you to use it as you see fit.

    5. ThisColumnMakesMeGratefulForMyBoss*

      Yes to this. The first time I was laid off it took me a year and a half to find a job, and my severance (and health insurance) was only for 3 months. Thankfully my parents were able to help me out because I depleted my savings and would have racked up some major cc debt if I had to pay COBRA every month too.

  4. Goose Lavel*

    I was laid off from a long term (9 yrs) full benifits job and was expecting 27 weeks severance per the employee manual, 3 weeks per year.
    I was quite surprised when I went through the HR exit interview to find out I was only getting 3 weeks severance pay; they had just updated the employee manual prior to the big layoff.
    This nearly bankrupted me, but fortunately they cashed out my 401k as it was less than $5,000 and I was able to save my home.
    Lesson learned about having 4 to 6 months living expenses in the bank at all times.

    1. ThatGirl*

      I was at my last company for about 9 years and the standard was 2 weeks of severance per year of service … only I’d only been a full-time employee for 3 years – I was a contractor before that. Of course it made no difference since I hadn’t been expecting a layoff anyway.

      But yeah, I wouldn’t say you should ever expect severance – it’s just a little something to help ease the job transition. Ideally we should all be prepared on our own for a job loss.

        1. The Man, Becky Lynch*

          You’re kind to say it’s only possible. This is so cutthroat that I’m comfortable saying that that’s exactly what they did! That’s not a coincidence kind of thing.

          1. 2 Cents*

            Just like it’s not a coincidence my old company updated their handbook from giving 100% maternity leave pay after 5 years to whatever the state gives for short term disability after 3 of us had babies in one year (after 6 years of no babies). And this is at a “woman owned business” too *eyeroll*

          2. Public Sector Manager*

            My wife got laid off from her long term employer (21 years) with a severance package of 2 weeks of pay for every year, not to exceed 10 years. At first she was really upset about being let go in round one of the layoffs. For round two of layoffs 7 months later, no severance for anyone.

          1. Fortitude Jones*

            Oh yeah – then they definitely updated it because they knew the lay-off was going to affect almost half their workforce and didn’t want to pay you guys, smh. Shameful.

            1. Goose Lavel*

              It really did suck. Been through many more layoffs since then and that layoff was the worst because I thought I had 27 weeks pay in the bank.

        2. Devil Fish*

          “It is possible they changed the handbook because they expected to lay off a lot of people.”

          What is the other possibility? I’m not seeing any other way to read it?

  5. Memboard*

    Canadians should note that they may well be better protected by the labor laws in their province. It’s common to have to pay earned vacation time and that for just about everyone there is a minimum notice period (that can be payed out). It’s also not rare for larger corps to be in line with the 1 week per year standard even if it’s above the legal minimum.

    1. Jenn G*

      Yes, in Ontario there are some pretty significant common practices of giving severance, upheld by actual court cases.

  6. Penny*

    What are the norms about severance pay when there are layoffs that are announced well ahead of the actual last date of work? I don’t know how common that situation is, but I have found myself there before — I had about 3 months of notice that my position was being eliminated. I was offered no severance at all, even though I was employed there full time for close to a decade, and was a high performer. I guess the assumption on their part was that they were being nice by telling us so far in advance?

    During the time between when I was notified and when my position ended I did keep my eye out for other opportunities, but there wasn’t much. Other life circumstances at the time meant that relocating wasn’t a possibility, and that a long commute for me wasn’t, either. Living/working in a rural area can mean that if you want a decent job you need to wait for a decent job in your field to open up, and that is far from an everyday occurrence around here.

    This was frustrating, but even more frustrating was when someone else was laid off for performance issues a year or two later, and got several MONTHS of severance pay, including staying on the company healthcare plan, which was a MUCH better deal than paying for COBRA. This was a person who had been close to losing their job more than once, and honestly I am still bitter about that whole mess.

    1. Countess Boochie Flagrante*

      When my old employer closed the office and laid off everyone in the building (approx. 330 people) they gave us 6 months’ notification of the planned closure, with waves of layoffs occurring as they wound down operations at that center (which also helped offset the market-flooding a bit). Severance was offered to everyone who stayed through their layoff date; if you found a job and left sooner, you forfeited the payment.

      1. Oryx*

        At ExJob it was very similar. I think they gave six months’ notice, too. I was given a transfer to a different branch, but those that weren’t forfeited the severance if they took a job before their layoff date.

    2. RainbowBrite*

      We were told in May that we would be getting laid off at some point this year and I only just today found out my last day will be in early October. The only reason I’m still here is so I can get the severance, so it seems like a really bad idea to not offer that when you’re giving months and months of notice.

      1. Penny*

        Huh. I hadn’t even thought about the idea of offering severance to people who stay through the end date to help retain people until they are no longer needed, as you and Countess Flagrante pointed out. Part of the deal with this old employer was that they were trying to encourage those of us being laid off to apply for a position at a different location. But there were two of us and only one position, and the commute was a complete dealbreaker for me. I’m honestly not sure why the other person didn’t apply, but I guess I can see how it’s a PITA to pick up and move even if you don’t have young kids or a spouse’s job to consider, which was her situation.

        In the end, I think that all of this was at least partially due to them not really thinking things through very well / not having a solid policy in place. There was other BS surrounding the restructuring when I was let go that I won’t go into here, but let’s just say they were in deep and didn’t have the structure/leadership to deal with things as well as they could have.

    3. BRR*

      I know sometimes employers will offer a severance if you stay through the notice period because they need the work done. I can see employers treating that three months as a sort of severance since you’re getting paid and have a change to look for a new job (it’s obviously not the same as a severance).

    4. hbc*

      My company had layoffs that were anywhere from immediate (a couple people they’d been trying to get rid of forever) to 8 months in the future. It was kind of weird because there were apparently some financial benefits tying it to a split of the company, even though our area had nothing to do with the split.
      We all got severance offers that were only valid if we stayed for our notice period.

      As far as your company, it’s a lot easier for them to be generous when dealing with a single case than a bunch of layoffs. I also think that notice+severance is great, but nicer than required–the idea is that you get to keep paying your bills for a while regardless if you get one or the other.

    5. Natalie*

      Just another data point, I’ve been at two companies that had layoffs announced well in advance, and both used severance as a carrot to keep people from leaving before their layoff dates. As you might imagine, it was more effective for the employees who had been there for years and were expecting a large payout. Everyone who had less than a year tenure left pretty quickly.

    6. Ancestry Anon*

      It may be different if you’re subject to WARN – 60 days’ notice of a layoff prior to actually leaving the job. I went through that (and it was generally understood that my workload would decrease over time and I could use work time to do job hunting stuff) and also got 1 week/year of service severance plus 3 months of COBRA.

      The only constraint I remember was that if you took severance as a lump sum, you signed a document waiving your ability to be rehired/recalled (this company recalls people pretty often). The alternative was to collect severance as if it were standard salary payments for the duration. Since I was union-represented and our contract spelled out certain things regarding severance and recall rights, I don’t think negotiating was an option (no idea for non-union, I suspect they had a similar setup).

  7. Chinookwind*

    “It’s common to have to pay earned vacation time.” In Canada, it is REQUIRED to payout your earned vacation time. That money (which is 4% of your standard wages) is legally yours as part of your basic compensation. Unless it is paid out as you go and is labelled as “vacation pay” on your paystub, it belongs to you and not the company.

    1. De Minimis*

      This is also one of those “except in California” cases–California law has the same requirement, and also requires your final check including all vacation time to be paid to you on your last day assuming there’s been at least 72 hours notice.

      I ended up filing a claim with the state due to my previous employer waiting a couple of weeks to pay me my final paycheck. They weren’t located in CA and I guess either weren’t familiar with the laws here or else thought they didn’t apply. Ended up with a decent settlement.

      1. lnelson in Tysons*

        There are a hand full of other US states that are like CA in that regards. Any accrued but unused vacation is to be paid out to the employee upon separation. And at least in Massachusetts, if they let you go they are supposed to pay you on that day.

      2. MintLavendar*

        In these cases, it’s worth noting that they require that employers pay out accrued vacation, but there’s no requirement to accrue vacation. If you have an unlimited PTO arrangement, there’s no accrual and thus no legal obligation to pay out any vacation, even in CA.

        1. PollyQ*

          Yep, my sister’s CA employer made the switch from accrued vacation to “unlimited” a few years ago, probably partially to avoid having all those vacation days sitting on the books as an accounting liability.

  8. Curiosity killed the cat*

    Just curious – is there any recourse for someone over age 40 who wasn’t aware of the Older Workers Benefit Protection Act and wasn’t given 21 days to review a severance offer?

    1. Mockingjay*

      I knew nothing about this act until today. It would have been useful knowledge when I was laid off a few years ago. We were ushered into a room, each given a letter, and told by HR that we would be laid off in six weeks. When asked about severance, HR told us that the six weeks notice was our severance. Leave would be paid out, but none could be taken during the notice period. (Our supervisor quietly let us use leave anyway for job interviews.) No negotiation of terms was permitted.

      There were six or seven employees over the age of 40 in that layoff, including myself.

    2. Mr. Tyzik*

      I was unaware of the act. When I received my severance offer, I was required to sign it within a couple days along with recognition that I had been advised of the layoff and had the chance to address concerns.

  9. Construction Safety*

    My last lay off occurred the day I told them I was about to go out on temp. disability. I had been with them for 7 years, but they had been purchased 2 years before. I got 2 weeks severance & 2 weeks vacay pay out, but had to use COBRA the beginning of the following month in order to have surgery on schedule.

  10. IV*

    Once upon a time, I was being pushed out of a job after getting a new manager. After years of exceptional performance reviews I was placed on a PIP for really mushy reasons like “needs to be more organized / dedication to job / communication skills.” This was at a time when the company was undergoing other major upheavals, so I could see stuff blowing in the wind (or flying toward the fan I guess). Instead of signing the review / PIP I went to HR and said “I won’t sign this and don’t accept it. We’re clearly at an impasse. I want a month of severance for each year I’ve worked here and no argument with my unemployment claim and in exchange I won’t sue you.”

    This was a baseless threat by the way, I’m in a right to work state and had no leg to stand on. However, a colleague of mine did have a legit ADA discrimination claim and my interaction with him was part of the reason my boss was pushing me out, so I think they were skittish. They offered me half the severance I’d asked for and I had no issues with getting unemployment. If I’d have known then what I know now, I would have pushed for covering COBRA as well, especially as this was in pre-Obamacare days.

  11. Layoff Laments*

    Is there always a severance agreement to sign? I was laid off recently but was never presented with any paperwork to sign. The company does have a policy it provided to us ahead of time and the day of the layoff. Did that count as the “agreement” I am agreeing to?

    1. Devil Fish*

      Are they paying you severance? That’s all the severance agreement would be for. If it’s just a standard layoff with no severance attached, it’s pretty normal to not sign anything.

      (You also might have signed something agreeing to the policy with your new-hire paperwork—a lot of places will give you copies of things you already agreed to back when you were signing all the “sign this now or gtfo and find another job” documents because you won’t remember signing any of that and they know it.)

      1. Layoff Laments*

        Hmm good to know. I’ll have to look into the new hire paperwork, as I am getting severance. Thanks!

  12. Southern Living*

    Other items that I negotiated for my severance package: training and education benefits (I looked up courses/sessions and said I’d like x amount to do this, such as take a computer course on Adobe InDesign and take adult language classes to learn a new language) as well as I was given outplacement services at a third-party firm paid directly to the third-party by the old job. I also negotiated the time frame of for how long I got outplacement services (I went from the standard-offered 6 months to 1 month and said I would put the other 5 months of what they would have paid towards the training of my choice).

  13. Amy*

    In this Sunday night’s episode of HBO’s Succession, they had a scene {spoiler alert} where the Rupert Murdoch style parent company rips through the small start-up they’d acquired.

    They spend a few days secretly gutting the intellectual property, then tell the employees they have 5 minutes to leave, health insurance is immediately voided, 1 week severance per year, anyone who posts about it will forfeit a severance. The parent company seemed to go out of their way to be adversarial.

    It made me wonder how this plays in real life. Wouldn’t other companies fight acquisition watching this? Does it not play very badly in the media? I imagine it’s likely inspired by actual Rupert Murdoch style take-overs but I just wondered if offering a little more severance and less hostility wouldn’t be a less risky move.

    1. YouGottaThrowtheWholeJobAway*

      @Amy It’s fairly realistic to me for NYC / conglomerates.

      I’ve seen some bonkers paperwork from friends laid off in publishing, media and adjacent fields over the years — if you don’t sign on the dotted line and keep your trap shut in mixed company, you don’t get a cent. Sometimes they’ll even throw in stuff that’s not actually legally enforceable. A lot of places screw up their communications with IT and kill your email/logins before you’re told you’re getting laid off, which is amateur hour, but it happens.

    2. Pay No Attention To The Man Behind The Curtain*

      Well, a hostile acquisition is usually done in a way that the acquired company is unable to fight back on anyway. The top dogs of the acquired company tend to make out just fine — either they are the ones who sold the company for a tidy profit or they negotiated a golden parachute (severance) — and it’s the rest of the employees that get stuffed. The belligerence of the take over might make for bad publicity, but I imagine the money made by gutting the acquired company more than makes up for a slight, and probably temporary, drop in either revenue or good feelings. Media backlash is usually a lot of “sound and fury signifying nothing.” The parent company is trying to intimidate people into staying quiet — so being super hostile works to their advantage.

  14. Quickbeam*

    I just want to add that after 50 years and quite a few jobs, I ‘ve never once been offered severance when I was fired. I’m in a professional category, it just isn’t done in the jobs or industries I worked in. I’m always fearful when I read this as an issue that people will think it is done everywhere. It isn’t.

    1. ThisColumnMakesMeGratefulForMyBoss*

      Fired or laid off? IME, severance is only offered when you’re being laid off due to a company restructure/elimination of your position. Being fired is generally for cause.

      1. Quickbeam*

        Both. Never got anything other than accrued vacation time. My only point was that it just isn’t the norm in all industries. And in my at-will state, firing isn’t just for cause.

        1. ThisColumnMakesMeGratefulForMyBoss*

          Curious, why would someone get fired if not for cause? Because manager was having a bad day and just felt like firing me?

          1. Former Employee*

            Because there’s a new manager who doesn’t like you. It’s a reason, but it’s not what anyone would think of cause to fire someone.

    2. ThatGirl*

      Were you fired, or laid off? Because I’ve been fired once (terminated for cause) and laid off once (my position was eliminated). When I was fired I got nothing except the unused vacation days they legally owed me. When I was laid off, I got severance and “outplacement services”.

  15. Acornia*

    Definitely don’t sign on the spot, no matter how much pressure you feel. My husband was pressured into signing a severance document when he was let go with no notice, they told him he had 10 minutes from the time they handed him the folder of documents to accept and sign or forego any severance pay. In the 17 page severance agreement he signed away all the company stock we had bought through the employee purchase program in exchange for 10 weeks severance pay. It was not verbally stated in the “comprehensive overview” speech they had to listen to. We did not realize this had happened until we went to cash it out some years later. It cost us about $10k. Hubby talked to others who were laid off at the same time, neither of them knew they’d also been had, and one was about to retire and had been counting on that stock! I was so pissed. Bad enough he was blindsided by his job being outsourced to India, but they screwed over everyone that way!
    I wish we had realized that much sooner so we could have had some recourse.

    1. Devil Fish*

      I doubt you would have had recourse, since he did sign the documents.

      Expecting someone to read, understand and accept/decline 17 pages of legal documents in 10 minutes is completely unreasonable but they did it because they wanted people to sign it without reading it through and there doesn’t tend to be a lot of recourse for “I signed it but didn’t read it” (except in limited circumstances where you sign something that is explicitly presented as being the opposite of what you signed—just leaving out some of it isn’t usually enough to invalidate the contract). Lawyers please correct me if I’m wrong on this but I’ve had lawyers explain this to me before.

      1. Book Badger, Attorney-at-Claw*

        I’m not a contract attorney, but my gut response to these kinds of questions is always: it depends!

        An attorney could make the argument (no idea if it’d be successful, but I think it would at least pass the laugh test) that the contract is unconscionable because the situation was coercive and unreasonable. The situation under which the contract was signed can be unconscionable (ex: I threaten to kidnap your dog if you don’t sign this standard car sale contract) or the contract itself can be (ex: you sign a contract for a car sale that, unbeknownst to you because I wrote it in extremely dense legalese, gives me ownership of your dog). There isn’t a real standard; it’s just what the judge thinks is grossly unfair (it “shocks the conscious”).

        Therefore, an argument could be made that giving a person ten minutes to read and decide to sign a 17-page contract without the benefit of a lawyer, and also without explaining to them that they are losing a significant amount of money that they would otherwise rely on, is unconscionable both in the procedure (you were basically coerced into signing) and in the contract itself (you are signing away a big chunk of money without knowing it).

  16. Lady Kelvin*

    I didn’t know that the WARN act required 60 days notice or 60 days severance. Is there a time frame where the at least 50 employees have to be laid off? I’m just imagining that a particularly savvy/awful company would lay off 49 people every couple of weeks to get around that rule.

    1. Not Me*

      It’s 50 people within a 30 day period. Or 90 days if there are multiple layoffs that individually don’t meet the lower threshold alone, but together do meet the threshold.

  17. Philosopher King*

    Is there a way to find out how many people were laid off so you can know whether the WARN Act applies?

  18. Phil*

    On the other hand, I once moved to Seattle from LA for a job, got fired in a month-I was really ill suited for the job-found another in a couple of days-pure luck-and was laid off in a year. Nicest layoff ever. They were so sorry, gave me 3 months severance and even helped me pack and load my truck for the move back to LA.
    Really. And I’m still friends with some of the very nice people I met in Seattle.

  19. Office Cat*

    I was laid off a month ago (position eliminated) and I got 6 weeks severance pay for working only two years.

    I was working at a very small tech company for about 1 year when it was partially acquired by a larger tech company (about 600 employees). Several of us from the small company were moved over to be employees of the larger company. It was good at the time, my pay was the same but benefits were great.

    So after being an employee at the big company for about 1 year now they decided to reorganize and outsource a lot of the data work. I was among about half a dozen laid off. It was the nicest layoff I’ve been through (the times I was laid off in past I was immediately booted out the door with my last paycheck). I got 8 weeks notice and did my work to the best of my ability until the last day. They even had a nice lunch brought in for the laid off employee’s last day, a little weird, but ok. The employee handbook said 3 weeks per year of employment for severance pay and they included my one year in the small company for my seniority, giving me 6 weeks of severance pay. I also got 2 months of COBRA paid. I have maintained a good relationship with the company and would consider going back if they had a suitable position open up.

    I did not get any leftover PTO paid out. This year the company went to unlimited PTO instead of accrued time. If they had stayed with accrued PTO I would have had 4 weeks per year. In figuring out how much unlimited PTO to use I had just pretended that I had the 4 weeks still. I made sure to take 5 days off per 3 months. I was glad I did that as I got as much use out of my PTO for this year as I could (2 weeks in 6 months).

    The HR rep that walked me though the severance paperwork was very helpful and encouraged me to read everything carefully and ask as many questions as I needed to before signing. I did not ask for anything more than what was offered as I thought what I got was fairly generous given my short time employed there.

    The CEO of the large company is a down to earth approachable guy. I met him a couple of times when he came out to our remote office location, and when I traveled to the main HQ office for a company-wide event. I think he remembered me because I was one of the few employees that rides a bike to work every day. A few days before I got my layoff notice I got a nice handwritten note from the CEO congratulating me on my 1 year of employment (with the big company). I wrote him a nice email thanking him for the thoughtful note but that I had just gotten a layoff notice. He wrote back right away admitting that the timing was embarrassing. (I wonder if he still sends out the yearly thank you notes now?)

    I eventually noticed that the 8 weeks of notice was not totally out of the goodness of their heart. The WARN act requires larger employers to give at least 60 days notice of a layoff.

    A short time after I left I heard that they laid off another guy on the team. He had been with the large company for over 15 years. I hope they gave him the 3 weeks per year of employment of severance pay.

    I’m also going to collect UI. I’m in Colorado. It wasn’t clear on the UI website about how severance pay was handled in relation the the UI claim. I am now finding out that UI wants me to finish collecting the severance pay (paid every two weeks like my regular paycheck) before I start collecting UI. It may work different in other states.

  20. pcake*

    Years ago, the large aerospace company my mother worked at moved to another state. She was given the option to move to the other state or severance pay plus some other stuff. If she moved to the other state, they were offering a pretty generous moving package including cash and help finding a place, and they would let her use a company apartment till she found a place.

    My mother, however, loved her condo, and all her family is here, so she opted for door number 2. They gave her five months’ salary plus let her keep a part of her pension (as I recall, it was about 25% of what it would have been years later had she worked there 20 years, but I doubt she was even 15 years in) and paid her health insurance for life. She was asked to sign an agreement that she wouldn’t sue them – which she wouldn’t have anyway.

    She was pretty happy, and I admit we all had more positive feelings about the company because of the way they handled things for my mother when she didn’t want to make the move.

  21. Me--Blargh!*

    OldExjob gave me six weeks severance when I was laid off, which really helped. COBRA was out of the question, however. Way too expensive.

    Exjob did not. They just paid the paychecks and PTO I had coming and kept my insurance active until the end of the month (I got fired on Nov. 10). I wish I’d tried to negotiate; the reason I had so much trouble was actually because they changed the job. I tried to do the new job and just couldn’t given my LD. Under ADA, they could still fire me since I couldn’t do it even with accommodation and my performance suffered. But I didn’t know that was an option I could even bring up. I don’t know that it would have helped, but it might have.

  22. yomikoma*

    Had a previous US employer bought by a European company then shut down slowly. Apparently severance is not a thing in Europe (at least in their sector) so they announced there would be no severance and then wondered why nobody would lift a finger to help them transition. Previously people had gotten 2wks/yr even when fired for cause. Still bitter about it (and holding a grudge against the small country the new owners were based in).

    1. Media Monkey*

      that depends on the country. severance (we would call it redundancy) absolutely is a thing in the UK and there are legally mandated minimum payments.

  23. Cat Meowmy Admin*

    My only experience with severance (in the workforce for 40+ years now) was during the ‘great recession’ period. I was an Admin with old employer for 10 years. There were several waves of layoffs beginning in 2008; I was laid off in Sept. 2010, at age 55 at the time. (I don’t know if the Older Workers Benefits Protection Act was in force at the time, otherwise I might have negotiated a bit more.)
    In my case, company ‘did the right thing’ as we say here in NYC. After some long term issues, I’d had enough; basically hinted begging to be laid off. Yeah it was that bad. My SVP and HR Director were clearly aware, and treated me very well, offering me the best options available for my exit. In addition to being eligible for re-hire, I was given a generous severance compensation (especially for those times) and payout of accrued PTO. Filing for UI benefits was no problem and not disputed (as a ‘reduction of workforce’). Also provided with 8 weeks of outsourced career advisement (like group therapy), and continuation of medical/dental coverage through the end of the year. Which I took full advantage of btw. (Fortunately, I was then able to get on my husband’s medical insurance through his company at the beginning of the new year during their open enrollment after my own coverage ended.)
    I was given plenty of time during the exit interview to ask questions, fully read the documents (clearly explained verbally as well), and I signed willingly. All things considered, I actually felt very fortunate to receive as much as I did, considering that period in time when so many had so little, if anything at all. And my SVP and HR Director (who knew about the bs I was dealing with) couldn’t have been kinder or more supportive throughout everything. We 3 shared a lovely poignant moment before my departure. An added intangible bonus that meant so much.
    ** TL;DR – My takeaway:
    1) Throughout the course of your career, always *gift yourself* (and others) with the goodness of your own integrity and ethics. Have faith that those qualities will serve you well, and you will be remembered for that.
    2) Sometimes quality leadership is, in fact, demonstrated by the best executives, with fairness, respect and kindness towards you and others. (Thank you, Steve S.!)
    3) There are also those HR Directors and staff who seem to be made for their work, because they know how to emphasize the “Human” part of Human Resources. (Thank you, Jeanne!)
    Thanks AAM for allowing me to share. :)

  24. Sled dog mama*

    I was able to negotiate a severely of sorts when I left my job voluntarily. I accepted a new position and was going to have a two week gap between ending employment and starting new position. Old employer called me a week before my final day and asked me to continue covering part of my duties remotely, I really wanted those 2 weeks off but I also didn’t want to learn the specific client they were asking me to cover in the lurch. I was able to negotiate that they would pay me hourly for the work I actually did (it was an on demand thing so it wasn’t many hours) and they would cover my COBRA for a month as a sort of retainer. Ended up working fantastically because while COBRA was very expensive for a month (we had amazing health insurance) they just paid me the equivalent of a month and I was able to get a policy that cost less and covered my family for the 3 month gap before new employer’s coverage kicked in.

  25. Mr. Tyzik*

    I was laid off 2 years ago on my 20th service anniversary. I was given 45 days notice. I received a year’s worth of severance, PTO payout, and COBRA paid for the year I received severance. I looked for 8 months before finding a new job, so that severance was much appreciated. This was from a Fortune 50 company; in a way I wasn’t surprised that they were generous yet I was surprised at how generous.

    I’m not sure that the layoff itself was handled well. 45 days was a long time and it was hard to show any interest in work for those weeks. But the severance part was handled very well, almost seamlessly during my transition out.

  26. Former Employee*

    I was told by people who were laid off from a company where I used to work that they were brought into a room, told they were being laid off and had to sign paperwork saying they would not sue the company or they would forfeit their severance pay, They were not allowed to take the paperwork home to review and were not even allowed to make a phone call.

    This was years ago, but even then I wondered if this was actually legal.

  27. MAC*

    Wow, I was still holding on to some residual bitterness from my nearly-2-years-ago layoff (10 of the 11 positions eliminated were women, 8 of whom were over 40, with 7 of us over 45, hmmmm), but it sounds like I had it better than a lot of folks.

    All banked vacation was paid out plus one week for every year of service, up to 20 years. (One of the other women had her 30-year anniversary appear in the newsletter around the same time we were notified.) I had 7 weeks of accrued vacation and was notified a couple of weeks before my 13-year anniversary, so I received a decent payout. Since I’m single with no kids (no college or braces to worry about!), a small house payment, and a paid off car, 20 weeks’ pay plus unemployment was enough to get me through the 9.5 months it took to get a new job, without touching savings or investments. I retained the rights to both my vested 401K and the balance in my company-led pension plan. No extended health benefits though, they timed it so our 30-day notice ended a few days before the end of the month. I gambled and did not sign up for COBRA and was fortunate to only have to pay for a couple of maintenance meds out of pocket.

    I just celebrated my one-year anniversary working at a great nonprofit, with a terrific manager who does none of the things I see in letters here. I hear that morale at Previous Workplace is still pretty miserable – turns out the only things I miss are lunch runs with my BFF and the artificially inflated salaries at a government contractor!

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