eSign Severance Agreement Made Easy

Esign severance agreement

some companies will offer a severance package to employees who are laid off due to a downturn or for reorganization purposes if a division is phased out if a product line is phased out if the company is sold or the company is merged or any number of management decisions this is a voluntary program that is implemented by some companies it is not a right that anybody has with regard to their employment and it's not automatic even within a company that offers it for one group of employees if you have a contract with an employer then the contrary that contract will specify what will happen to you in these types of separation event so if you have a layoff coming or you receive notice of that and you have a contract to get out that contract and make sure that it is followed and if you need to seek representation to help you ensure that that occurs now if you don't have a contract per se for an employment contract and you are offered severance there are several things that you should look at first of all I've looked at so many of these I've written them I've negotiated them on both sides and that's something that you need to understand this can be negotiated any contract can be negotiated if you ask for something and someone says no they just say no if they ask you about a provision and you say no you just say no please don't worry that it's a take-it-or-leave-it situation it really shouldn't be and again if you need to get representation even if it's just to read over the terms and to identify the issues for you and to give you an idea whether or not that's that's reasonable or maybe there's room to do better or negotiate or something like that okay and and most attorneys will work with you on that too to just review it and give you an overview but if you don't understand contract you should always do that in an event okay so the severance the main part you're gonna be paying attention to is how much money am I going to get generally a severance package includes payment for a period of time following the date of separation plus maybe some other benefits and then there may be some duties imposed back upon the person who's leaving the job usually it provides for a an agreed upon termination if it provides that you quit and you left your job voluntarily that can impact your unemployment benefits okay if it does not say that and it provides for you to be terminated then you can still file for unemployment you still have to follow the rules and where you live and be eligible and and look for a job and do those types of things so don't automatically assume that because you're signing a severance agreement that you can't apply for unemployment because most of the time you can but it depends on the provisions and that is a perfect example of something to ask for it to be changed for the verbage because that gives you that gives you an additional resource now look at the separation event is that covered by a non-compete I include this in the how much am I going to get paid section because if this termination is not an event that's covered by your non-compete but this employer still wants you to not compete then they should pay for it alright so that's an additional area of for compensation then and if it's not then then the contract should terminate that non-compete should terminate you can enter into the severance agreement whether you want to you know if you want to and then you should be free to participate in that same business and of course your best argument is well if I am so valuable that you don't want me competing with you then I should still be working here so there's there's a little tidbit for you now when you're being paid under vii agreements sometimes you're paid out at a normal pay day time whether or not it's your your same salary or the same rate of pay it will usually be a lump sum either paid all at once or in a couple of chunks or it will be paid out over a period of time and then there will be a time frame assigned to this say we're gonna pay 3/4 of your salary for 18 months there may be a schedule based upon how long you were with that company so review your records review your tax records so that you can make sure that if it's based upon seniority or length of service that you are getting paid for the total amount that you should be paid for now why do I care whether it's paid lump sum or overtime the employer may want to do that because then it they can spread the liability out over a period of time when they have multiple people to pay and also remember employers have to pay their share of taxes on this and so that increases what they're paying you is not just that number it's quite a bit more so you want to they might want to pay it over time you may be able again to negotiate if they want to pay it out over time take a little less and get all of it upfront it depends on how financially savvy you are and if you can follow a budget and make that money last until you have another job but that's another angle for you but either way you need to check the withholding that you have been using for your regular paycheck because this severance amount depending upon what time of year it is if you're coming up on the end of a year and you had a $50,000 salary and they're going to pay you multiple times more than that maybe three or four times and it's going to be a lump sum and it's right at the end of the year that's gonna impact your taxes so you want to modify your withholding or at least bump up your withholding to have more taken out of that big check so that you don't go roll into the next year and have bigger tax liability same same scenario well not same scenario but same question if it's paid out over a period of time and the net or the gross amount that you're receiving is less than what you were paying what you were being paid before again adjust your withholding so that you have your necessary cash flow and check those amounts now if you are receiving a look a lump sum unless your payroll people pay attention the way a payroll service or others usually work is whatever that amount is being paid to you they I don't know why they do this but they somehow plug it in that so you're going to get a bonus a severance of $50,000 they'll plug it in that that's your new that's your new pay rate they're gonna take a chunk out of that so you want to make sure that if you're not subject to backup withholding and different things like that you check your tax liability with your accountant where you are in the year look at your stub talk to the payroll people and make adjustments they can they're allowed to make those adjustments so you should be aware going into this so that you can use that money to cover your liability before that payment now sometimes you'll receive pay sometimes you'll receive other things one thing to check if there is a retirement plan that you're enjoying can you use part of that severance and use a percentage of that and go ahead and contribute to your 401k what about a stock option can you get additional stock options to the stock options apply only if you work for the company or can they be used outside find out do you have several sick piles and stock options do you have some that have been optioned that have built up and are they exercised about now do you want to go ahead and exercise those with additional money that you've been saving up to do that maybe the new you know your company is downsizing because they've got this new great invention you just don't happen to work in that area but they're gonna go gangbusters and you want to take advantage of it use that in your negotiations creations by the same token can you use part of the money that you're getting to buy additional stock options if that's something that you want to do talk to them about that before you agree to the amount that you're going to be paid are you right now eligible when this is happening are you eligible for bonus or additional commission or incentive pay and there's lots of different things that they call it or is that coming soon did this happen like the week before those numbers came out but do you know what your numbers are use that information to help yourself you don't necessarily need to tell everybody in your department or everybody in your company either about what you plan to do you are looking out for number one which is you what they do with anybody else is up to anybody else if you go seek counsel and you get some information or you watch this video and you get some ideas well I encourage you to share the video but let them come up with their own plan remember that you're looking out for you and if they pay everybody they're not going to be able to pay you the additional amount that you might want or that you might feel that you deserve now coming up back onto benefits health insurance Cobra or state continuation should be a part of any separation regardless of whether it's severance so find out what that is do you know how much is paid on your behalf before you make your additional contribution can you prepay that if you're getting a lump sum can that be deducted so that you're covered what is the period of time is it 18 months is it a shorter period is it a longer period how much is it going to cost you have they already negotiated next years right so that you can plan for that find out is there disability coverage is there life insurance coverage will they continue that for you for a period of time at their cost and then can you take that over there might be maybe you've had this life insurance and then something happened to you that might make affect your insurability and go look at our life insurance video for those types of things but anyway you might act ask them can I take this over this was this policy was acquired when I was before whatever happened happened and I want to keep it you might be able to do that find out what the premiums are and then one of the best benefits for a severance package is headhunter or career services that they can provide is there a choice between different companies find out about those different companies that are around what their rates of placement have been get references from them to find out what one do you think is going to be the easiest for you to work with have that included into your into your contract and then over all of this keep in mind the statistics on how long it takes a person in your position or similar position with your experience to find new employment keep that in mind as you negotiate or discuss both the pay and the other benefits how long is it going to take for you to find a new new job and you know use that information as a bargaining chip and with these different things that takes care of the pain the benefits now the main reason that a severance is offer is to get waivers so expect waivers to be included in this document waivers of ADEA Americans with Disabilities Act age discrimination gender discrimination medical or race racial discrimination claims there will be a whole bunch of acronyms and case statutes sites in there because they're buying a closed package you're you're moving on they're paying for this they're getting their waivers they don't have to worry about an EEOC charge coming later or some type of state discrimination matter so think about that because if you sign that waiver you're done if if this if this separation is as a result of a lengthy illness or something that doesn't otherwise affect your ability to do your job think about it before you sign and again and again have somebody look it over for you but hopefully these tips will be helpful for you if they are helpful for you feel free to to share it with others and if you want to see more videos like this go ahead and hit the red subscribe button but good luck