A plant closes. Employees are out of a job. But in some cases, a company might offer severance pay and this could be negotiable.
According to The Muse, severance pay is a benefit that employers can provide to workers when they are being let go for reasons other than their performance.
With few exceptions, companies are not legally mandated to provide extra benefits to laid-off employees. Some choose to do so as a professional courtesy to valued employees. They might also offer the benefit to avoid lawsuits for issues like unpaid wages, wrongful termination, non-competes, or discrimination. Most severance packages involve legally binding contracts.
Employees that are eligible for a severance package should know that in some cases the benefits may be negotiable.
Most compensation is dispensed in a single lump sum payment of one-to-two weeks pay per year of service, but there are likely other options as well.
According to Salary.com, companies can cash out vacation and sick time, offer to cover health insurance premiums (Cobra), pay accrued bonuses and commissions, and automatically vest any deferred compensation. They could also agree to allow company property such as laptops and cars to remain with the employee in certain situations.
Use all options available to negotiate an agreement that works best for the given situation. A worker with a large family, for instance, would likely prioritize continuation of health care for 18 months over an upfront bonus payment.
It might also be helpful to ask for coaching or other outplacement services for a job search.
