Can You Negotiate Severance Pay in California?

If you end up losing your job, you may receive an offer from your employee for a severance pay package. While such packages are, for the most part, not a California law requirement, many employers want to offer some form of compensation to their leaving workers. Since few situation require severance pay, you may be more than happy to accept an offer without much consideration. However, it is still possible to negotiate the terms of your severance pay before signing off on the release forms. Speak with one of our attorneys for help with this process.

Reviewing the Release Terms

Every severance pay agreement involves several release terms that outline the money and other benefits you will receive from your employer. Before you think about negotiation, you want to ensure that you understand what your employer is offering. Key elements to look out for include:

  • The amount of money you will receive
  • Other benefits you may receive
  • How your employer will pay you (weekly, monthly, lump sum, etc.)
  • The date that benefits will stop

You may also see that your release terms include a confidentiality provision related to your work, as non-disclosure, choice of law, return of company property, and other clauses. It’s essential that you understand exactly what your severance pay agreement asks of you.

The release terms should also clearly outline the details of your severance package. If not, it can help to consult with an employment attorney to understand what your options are and make sure you are signing the agreement in full knowledge of what you are agreeing to.

Potential Places for Negotiation

Often, pay is one of our biggest priorities when thinking about your severance agreement. After all, even without active work, you will still need to pay your bills and take care of other expenses. However, you have likely been receiving other benefits than just your pay. Some areas you want to know whether they are part of your release terms include:

  • Any unused paid vacation time
  • Health insurance
  • 401k, stocks, pension, and other investments

All these terms can become subjects for potential negotiation. You may be able to come to an agreement with your employer about receiving the pay for your remaining vacation time. Your employer may also be able to negotiate an extended time frame for your health insurance benefits. If your current release terms don’t indicate what will happen to your 401k and other investments, you should also discuss this with your employer.

Just as with understanding the terms of your severance pay, you want to make sure that your employer clearly covers any results of negotiations in the release terms. You should ensure that all new severance details are present before signing the release form.

Wrongful Termination

If you were fired for illegal reasons, an employer may offer a severance package to smooth over the situation. If you believe you were the victim of wrongdoing, you should not sign any severance pay release terms, no matter what they include. Instead, you should contact a wrongful termination attorney to learn about your rights.

Severance pay is often a form of comfort if you lose your job. Ensuring you receive the best possible benefits through negotiation can make bridging the gap to your next job easier. Be sure to contact an attorney if you have any questions about negotiating a severance agreement.