If your employer decides to terminate your employment, it's critical to learn more about your legal rights in Michigan. This includes your right to receive severance pay.
Generally speaking, a severance agreement is a contract between you and your employer that outlines the compensation you'll receive upon leaving the company. It may also touch on what you are and are not allowed to do in the future, such as through a non-compete agreement.
If your employment contract calls for you to receive severance pay, you'll always have something to fall back on if the time comes.
But even if your contract doesn't say anything about severance pay, you may still be able to negotiate with your employer.
Here are several points to keep in mind when negotiating severance terms:
- Don't accept the first offer: The company may "low ball" you in an attempt to save money. By accepting the first offer you could be leaving a lot of money on the table.
- Know what you're signing: There is more to a severance agreement than the compensation you receive. For example, you may be signing away some legal rights, such as the right to file a wrongful termination lawsuit.
- Know exactly what you're getting: There can be gray area in regard to the specifics of what you'll receive and how you'll receive it. For instance, some companies pay out severance in a lump sum, while others make payments based on your previous payroll schedule.
There's more to severance than money
Don't focus so much attention on the amount of cash you'll receive that you overlook other benefits of a severance package.
Employee benefits are not required to be part of a compensation package, but you may be able to negotiate it into the agreement. Some of these benefits include:
- Health insurance
- Life insurance
- Disability insurance
- Pension programs
The biggest mistake you can make is simply being happy that you're eligible for severance pay. This could lead you to accept the first offer, which isn't always in your best interest.
The way you negotiate severance pay will go a long way in helping you obtain the compensation and benefits you deserve.
If you ask for a fair amount and stand firm, you're putting yourself in position for success.