Wednesday, August 1, 2007

What You Should Know About Employment Severance Package

As an employee, you are not entitled by the law to receive benefits under the employment severance package. However, you may be entitled to receive such package as a matter of right as an employee:

1. Agrees verbally to give you a severance package;
2. Signs a contract stating that you have a right to receive a severance package; or
3. When there is an implied right to a severance package or an existing condition wherein other employees having the same work position have regularly been given such package.

Since severance package has no standards provided by law, you can definitely negotiate to become a recipient of it. However, if you are part of a worker's union, your union will be the one to negotiate these matters for its members.

It is necessary to be careful in negotiating for your severance package. Many states provide that once you renegotiate your package, the other one previously offered by your employer become effectively withdrawn. In this case, if the employer does not accept or agree with the terms of your proposal, then you might end up not getting any severance package at all.

In addition, if you collect your severance package, you might not be entitled to unemployment insurance benefits. Some severance package may include terms, which entitles you to receive monthly payments without having to report for work anymore. However, if you are still in the pay roll the state may take it that you are still working and refuse to provide you with unemployment benefits.

For you to prevent being denied receiving unemployment benefits, make sure that your severance package is clear on the matter that your months worth of benefits are not shown as payment for hours still worked.