Maximizing Your Severance Package: What You Need to Know
Severance Laws in MassachusettsIf you find yourself facing job termination due to being fired or laid off, you might be offered a severance package. It's essential to understand that, unless you have a pre-existing employment contract stipulating severance, employers are not legally obligated to provide it. Here, we delve into the reasons employers might offer severance and how you can evaluate the package presented to you.
Severance Laws in MassachusettsIn Massachusetts, there's no legal requirement for employers to offer severance upon termination for most employees. However, many employers choose to provide severance for various reasons. Some offer it as a compassionate gesture to ease your transition, while others use it as a way to secure protection against potential legal claims.
If you have an employment contract that outlines pay upon termination, the terms of that contract will dictate what you're entitled to. These contracts typically specify separation pay and benefits for employees who are laid off or terminated without cause. Occasionally, the amount may be determined by your length of employment. In other cases, it's a fixed amount agreed upon in advance. In situations where an employee handbook outlines a severance policy, employers will generally follow it. While these policies are not legally binding, they can provide valuable insight into what your employer might offer. If you're presented with more than what the policy suggests, it may signal your employer's concerns about potential legal liabilities. Why Employers Offer Severance PayEmployers have various motivations for offering severance packages. One reason is to acknowledge an employee's dedication and contribution by providing financial support during their job search. Another crucial motive is to prevent potential legal action by including a release of claims within the severance agreement. This release doesn't necessarily imply that your employer believes they acted wrongly. Still, if you have any doubts about potential legal claims, it's advisable to consult with an employment lawyer before accepting the severance offer.
Taking Time to Consider a Severance AgreementIf your employer requests that you release claims related to age discrimination, they must give you 21 days to evaluate the agreement. Additionally, you should have an extra seven days to revoke your acceptance after signing. Even if the release pertains to other types of claims, you should be granted a reasonable amount of time for consideration. It's essential not to feel pressured into making a hasty decision; any employer insisting on immediate acceptance should raise a red flag, prompting consultation with an employment law attorney.
Severance Package: What it Should IncludeSeverance pay and benefits typically depend on mutual agreement or company policy since the law doesn't mandate severance pay. There is no hard and fast guidance on what is a reasonable severance, but commonly, a severance package consists of sa number of weeks or months worth of pay and continued health insurance benefits for the designated period.
Employer policies often outline the pay amount based on years of service and the employee benefits provided during the severance period. Although these policies are not legally binding, they can serve as a useful reference point. If you're offered more than what the policy suggests, it might signify your employer's concern about potential legal repercussions. Many severance agreements include compensation for accrued and unused vacation time. However, it's crucial to know that departing employees are entitled to payment for unused vacation days even without signing the agreement. Payment for unused sick days is an additional benefit not mandated by law. |
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Severance Pay and Unemployment
If you receive severance pay without signing a release of claims, it will count against your eligibility for unemployment compensation. However, if signing a release is a condition to receive pay and benefits, it will not affect your eligibility. This rule applies whether you receive payments over multiple payroll periods or as a lump sum upon signing the agreement.
Seek Legal Advice on Your Severance Package
In most cases, a severance package involves exchanging money or benefits for your agreement to release potential employment law claims against your employer. It's challenging to determine the value of these claims compared to the offered severance pay, especially when you receive the documents. Seeking advice from an experienced employment lawyer is crucial to understanding your potential claims' worth and your best course of action, including negotiating for an improved severance package.
Moreover, some severance agreements may require you to reaffirm prior agreements with your employer, particularly non-compete and non-solicitation agreements. You might have rights to challenge the enforcement of these earlier agreements. An employment attorney can assist you in evaluating your agreement and your situation before signing a new agreement, essentially recommitting to your previous contracts.
Moreover, some severance agreements may require you to reaffirm prior agreements with your employer, particularly non-compete and non-solicitation agreements. You might have rights to challenge the enforcement of these earlier agreements. An employment attorney can assist you in evaluating your agreement and your situation before signing a new agreement, essentially recommitting to your previous contracts.
Meet Our Employment Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, and helped thousands of clients on both the employee and employer side with severance and non compete review and negotiation, wage and hour, discrimination and retaliation disputes, workplace sexual harassment situations, and advice about employment law generally.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped clients with wage and hour disputes, employment discrimination, harassment and retaliation claims, review and negotiation of severance and non compete agreements, and advice to both employees and employers about navigating complex employment situations.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna has helped clients with review and negotiation of severance and non compete agreements, wage and hour disputes, discrimination, harassment and retaliation claims, and advice to small business owners about employment law and other business matters.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients on the employee and employer side with all varieties of employment law issues, including employment discrimination, harassment, retaliation, and wage and hour issues, litigation in MCAD and state and federal courts, and advising employers about employment policies and practices.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped clients with wage and hour, discrimination, harassment and retaliation disputes, review and negotiation of severance agreements, and litigation in MCAD and state and federal courts on employment related issues.
How We Can Help
Our experienced employment law attorneys are here to provide personalized advice and insights to help you navigate the complexities of severance packages, ensuring you make informed decisions that protect your interests. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
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