Top 5 Questions and Answers about Layoffs and Severance
Top 5 Questions and Answers about Layoffs and Severance
1. Will My Employer Revoke My Severance If I ask for More?
Answer: Not likely so long as you ask nicely and make reasonable requests. The company has offered severance because it wants to keep things as smooth as possible and a polite request should not jeopardize the offer. In fact, in the ten years that I have been representing employees, I have never heard of anyone losing their severance agreement simply because they asked the company to increase or modify the severance offer.
2. Do I have a legal right to get a severance package if I am laid-off?
Answer: No. The only people who have a legal right to severance payments are top executives who have written employment contracts. That is why you hear about the big shots leaving with golden parachutes. But most everyone else is an employee-at-will and sadly there is no legal requirement for severance. Severance payments are usually voluntary.
3. Can I sue for wrongful termination because my company had no reason to fire me?
Answer: Not likely. Most everyone is an employee-at-will and that means exactly what it says. You can quit for any reason and likewise your employer can fire you for any reason. Basically, you have no right to your job. It can be taken away anytime for any reason. The only real limits are the laws that prohibit discrimination, illegal harassment and certain narrow types of retaliation.
There are other laws that limit an employer’s ability to fire employees such as the Family Medical Leave Act. A few fortunate employees out there have written employment contracts that give them more protection but those are rare. Most everyone is an employee-at-will.
4. I am worried that I might get laid-off, what should I do now to protect myself?
Answer: A. The best thing you can possibly do to protect yourself has nothing to do with the law. You need to make yourself valuable so that you can easily get another job. Start networking, update your resume, keep your eye-out for other jobs, and acquire the skills that companies need.
B. Prepare to be fired by bringing everything that you might need in the future out of your office and take it home. [Don’t take anything that is not yours.] If you are fired, you might be led out of your office by security and you may never see that list of key professional contacts again.
C. If you think you are being discriminated against and have evidence of discrimination then make a copy and take it home. For example, if you are in your 50’s or 60’s and things are being reshuffled in favor of younger employees, you might want to keep track of how things looked before and after the shuffle because that might help prove age bias.
5. How Can I Tell if my Severance Package is Fair?
Answer: There is no magic severance formula or legal severance requirement. There are ratios that some companies follow but those have changed and they cannot be relied upon these days. The ratios vary anywhere from one month of severance for each year of service down to one week of severance for each year. Usually the higher up you are in the company the more you will get. Lower level workers will get one week per year while a top executive might get one month per year. But this is an old idea that really is not followed with any regularity today. Some companies still do follow similar formulas and many do not. There are no laws that govern the amount of severance paid to terminated-employees so companies are largely free to offer any amount they want so long as they do not discriminate. Also, a large factor is the financial health of the company, so today many companies are offering less severance pay.
