Skip to Content Top

Am I Entitled to Severance Pay?


Entitled to SeveranceSeverance pay is an option many companies use when they need to lay off or fire an employee. By offering a severance package, an employer attempts to protect themselves in one of two ways. If you are being fired under tense circumstances, a severance package is one way your employer may try to prevent a future lawsuit. If you are being let go, certain parts of a severance package might keep you from either competing directly with your employer’s company or from bad-mouthing your company in the future.

In either case, a severance package is offered to you in exchange for something the company needs. You are in no way obligated to accept a severance agreement, but many packages do end up being beneficial for both the employee and the employer, so they are worth considering.

Whether or not you are entitled to receive severance pay depends on a number of factors. Employment contracts, reasons for dismissal, competition, and potential lawsuits tend to be the largest predictors of whether or not you will be offered a severance package.

Reasons for Dismissal

The first and foremost question you may have upon being told of your dismissal is, “Why?” The answer to this question may well determine if you can or should be given severance pay.

If you are being fired due to provable incompetence or breaking company policy, you probably are not eligible to receive severance pay. Most employers are covered if they can prove that you did not perform your job up to expected standards, and are therefore allowed to fire you without offering you any form of payment.

If, however, you have experienced some form of harassment or discrimination in the workplace, you may be offered a severance package in exchange for your agreement to not sue your employer.

If your employer is laying you off (either alone or in a mass group), they may need to give you a severance package to protect themselves against breaking a contract or competition.

Employment Contracts

When you began your employment with your company, you may have signed an employment contract. If so, it probably spells out specifics that you and the company must follow in case of terminating your employment, such as how much advanced notice must be given. If your company is laying you off and this results in breaking that employment contract, you are eligible to receive some sort of severance pay.

Non-Compete Clauses

Your employer may also choose to offer you a severance package if you agree to sign a non-compete clause stating that you will not attempt to steal away clients or coworkers from your previous employer after leaving.

Have an Employment Lawyer Review Your Case Before Signing

Remember, no company is required to offer a severance package. But, if they are, they are doing so because they want or need something from you. With that in mind, it makes sense to have any severance agreement reviewed to make sure you are not giving up too much in exchange for little in return.

Do not feel pressured into signing an agreement right way, either. Most companies will give an employee 21 days to review any severance agreements before signing. Use that time to consult with your lawyer.

Most severance lawyers will offer a flat fee service for severance package review. You may choose to hire them for negotiation as well if you believe you are entitled to more.

Do you have questions about your severance package? Contact the Severance Lawyers at (800) 466-5015 to begin your review.

The post Am I Entitled to Severance Pay? appeared first on Severance Lawyers.

Share To: