review the Terms
Do not sign a severance agreement right away. Before signing anything, you should contact experienced employment lawyers such as Massey & Duffy.
What Are Severance Agreements?
The contract agreement is there to help resolve disputes between the parties that are involved. Before signing a severance agreement, you should consider certain factors, or else you’ll end up having regrets. In this blog, we’ll share some of the essential things to note before signing any severance agreement. However, even then, it is best to get legal advice before doing anything – do not act on your own.
As an employee, you may have the right to receive severance pay from your company or employer, and this has to be stated in the severance agreement. These rights come from the federal Worker Adjustment and Retraining Notification (WARN) Act. Following state laws and the federal WARN Act is best. The federal WARN Act gives Florida employees the right to advance notice of massive layoffs. … If the employer fails to provide proper notice, employees are entitled to damages.
If a company isn’t obligated to offer severance pay to its employees, it will still give payouts to terminated employees in exchange for agreements made in the severance letter.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods the hours worked, the transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
Qualified for Extended Coverage
Under the COBRA act of 1995, any terminated employee is qualified to receive health and medical coverage for up to 18 months after he’s been terminated. For disabled persons, it’s up to 29 months after termination, and premiums also have to be paid unless the employee has negotiated it.
An employee who is terminated can also request their employer to pay COBRA payments; this should be done within the first six to eighteen months after the termination notice. Since your employer will continue to pay your medical coverage, you might be subject to state/federal taxes. The employee also has the right to ask for other benefits such as disability or death benefits for a specific time period.
Another thing to consider is to include in your severance agreement is the outplacement assistance, this will help you find a new job, and the company that fired you can offer this service for free to help you secure a new job. Outplacement is a service that is supplied by companies that specialize in assisting former employees with job search tools following a layoff or job loss.
Check with your company to see if they offer this service at free cost so that you have peace of mind because you know that when your offer is terminated, you can get another job with ease.
In your severance agreement, you’ll find a short paragraph that prohibits terminated employees from communicating with anyone regarding disparaging remarks. The majority of the time, disparaging remarks are negative comments on the company about their character, integrity, honesty, business acumen, or morality that can affect their reputation. This means that as a terminated employee, you can’t talk to new employees about the working environment or the reason why you left. As an employee, you need to be careful about these and must decide carefully before signing any severance agreement that includes such terms.
Last Pay from Employer
When it comes to severance agreements and being terminated from your position, one may consider the most critical question is “what’s in my last paycheck?” or “what severance pay will I receive per my agreement?” The last paycheck should include any payouts for accrual of vacation time, personal time, and sick time, as well, if the company allows it.
As an employee, it’s advisable to arbitrate disputes instead of immediately thinking about litigation. You should consult a competent attorney that can translate the terms of a severance agreement so that you can understand what your employer wants you to do and to assist you in negotiating a deal that is agreeable to you and your former employer.
If you need help with drafting a severance agreement to call us at Massey & Duffy. We can also help employees negotiate severance agreements. The issues can be numerous, too many to list in this short blog; so, do not go it alone.