Severance agreements- have you ever received one from an employer?
With so many people being blindsided by layoffs and unexpected terminations, it’s essential to be prepared for a potential offer with a solid strategy and smart negotiation tips.
While there is no federal law requiring that employers provide a severance package, such a package is typically offered as a gesture of goodwill. Here are some smart tips for handling a severance agreement should one be offered to you:
1. Don’t sign the agreement on the spot. Ask (in writing) for time to review the agreement with your significant other (or an attorney).
2. Lawyer up if needed for the following circumstances:
§ You suspect discrimination, retaliation, or wage violations
§ You have a complex compensation plan (commissions, bonuses, etc.)
3. Consider your negotiables and prioritize what’s most important to you. Things to consider:
§ More compensation
§ Coverage of your COBRA payments for x period of time
§ Unused vacation/PTO payout
§ Outplacement/career coaching
§ Reference language (or a neutral reference clause to protect your reputation)
§ Noncompete agreements
§ Severance coordination with unemployment benefits
4. Consult a tax professional. Lump sum payments may affect your tax bill. However, you may be able to negotiate splitting your severance payment across tax years.
5. Clarify the final details. Ask about final paycheck date, timing of PTO payout, laptop/phone return, when email shuts off, and how to access W‑2s/benefits portals later.
6. Get everything in writing. Make sure you are only signing the fully revised agreement; verbal agreements don’t count!
Many severance agreements are not “take it or leave it”; severance can be a negotiation. Approach it like any other business deal: know the law, know your value, and ask—politely but clearly—for what you need to land on your feet.
Shelley Maley, PHR, CCSP
Dreamcatcher Career Coaching, LLC
www.dreamcatchercareercoaching.com
(610) 663-0585
Communications Chairperson – Pennsylvania Career Development Association (PACDA)
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