What's Typically Included in a Severance Package?
Severance packages can help ease financial strain while looking for a new job, but it is important to understand that accepting severance packages sometimes come with stipulations that can impact future job opportunities.
Severance lawyer Dan A. Atkerson reviews severance agreements in Allen, TX, Plano, TX, and Frisco, TX, and is available to review your severance package and help you get the compensation you deserve.
What Is a Severance Package?
A severance package is compensation and other benefits an employer gives to an employee when their employment ends. Besides paying out remaining paychecks or unused time off, severance packages may also include additional compensation, such as cash payments, or other benefits, like a temporary continuation of health benefits.
Severance pay is typically offered to employees being laid off but may also be offered to employees who resign on their own. The payment amount or other benefits offered depends on an employer’s policies and often takes into account the amount of time an employee was with the company.
What’s Included in a Severance Package
What’s included in a severance package will vary based on each companies’ policies. Although severance packages are not required by law, employers often offer them in goodwill or as an incentive to prospective employees.
Exactly what is included in a severance package is unique to each company and may even vary among employees based on their employment contracts. With this in mind, severance packages typically include:
- One to four weeks of pay per year of service
- Payout of any unused paid time off (PTO)
- Continuation of health insurance coverage for a specified period of time
- Continuation of other insurance coverage, like dental and vision, for a specified period of time
- Retirement plans or 401K benefits
- Company stock
- Employee discounts
- Job placement assistance
- Career counseling
In addition to financial compensation and benefits, severance packages may also include non-compete and non-disclosure clauses.
Non-compete agreements are included to prevent a former employee from working for a competing company or from starting a competing company in the same industry. Non-disclosure agreements are included to keep former employees from sharing sensitive or proprietary information or speaking ill about the company.
Do I Need a Lawyer to Review My Severance Package?
Employees are usually given a few weeks to consider accepting a severance package. During this time it’s worth having a lawyer review the severance package before signing the agreement.
Attorney Dan Atkerson previously explained why you should hire a lawyer to review your severance package. When it comes to reviewing a severance agreement, a skilled employment law attorney can:
- Make sure non-compete or other stipulations don’t limit your job opportunities
- Determine if your being offered sufficient compensation
- Get oral or “hand-shake” agreements in writing
- Maximize severance pay
Schedule a Consultation
If you have been offered a severance package, it is important to speak with an attorney before accepting and signing an agreement. To schedule a review of your severance package, or for any other legal needs, we welcome you to schedule a consultation with attorney Dan A. Atkerson.
