Is it ever a bad thing when your employer offers to pay you money other than your usual salary? Getting paid a bonus from your employer is great, but what if the extra money is a Trojan horse? What if accepting the pay raise means that your employer will send you text messages every few minutes when you are not at work, and the good days are the ones where you get to sleep four non-consecutive hours in a 24-hour period? What if accepting the bonus means, explicitly or implicitly, that you have to keep quiet about the unethical conduct that you witness at work? Giving an employee more money does not excuse exploitation, and paying someone not to report crimes and some other types of wrongdoings is against the law.
What if your employer is paying you to go away? Should you take the money and take a hike, or should you stay and fight? Whether it is better to accept the money your employer is offering you as compensation for terminating your employment or to file a wrongful termination lawsuit depends on the details. If you have questions about a severance package that your employer has offered you at the end of your employment, contact the Irvine severance lawyers at HKM Employment Attorneys LLP.
Are Severance Pay and Separation Pay the Same Thing?
The term severance pay refers to money that your employer pays you when the employment relationship ends; it is sometimes paid in a lump sum and sometimes in installments. When the severance pay is a provision of your employment contract that you sign at the beginning of the employment relationship, then it is synonymous with end of service pay or an end of service bonus. The more common meaning of severance pay in the United States is separation pay, which an employer pays an employee when the employer terminates the employment relationship, whether the employee has signed an employment contract or is working for the employer on an at-will basis.
The most common scenario where employers offer severance pay is when an employer lays off employees because of a corporate restructuring, because the employer was bought out by another company, or because the employee is suffering financial hardship and must let some of its employees go. In other words, the employees have not done anything wrong to warrant getting fired, but the employer is not giving them the option to continue working there and getting a paycheck.
What Do You Get in a Severance Package?
If your employer terminates your employment through a layoff and not because of wrongdoing or poor performance on your part, the employer may ask you to sign a separation agreement. If you sign the separation agreement, you promise not to sue the employer for wrongful termination of employment, and the employer sometimes offers you a severance package as compensation. The severance package often includes enough money to make it worth your while not to sue; the money is usually equivalent to a few months of your salary, and most employers accept it because they think that it will be enough to prevent a gap in their income until they can find another job. The separation agreement may state that the employer will pay you the severance pay in a lump sum or in monthly installments.
The severance package might also include other benefits besides money to act as a temporary replacement for your monthly paycheck. For example, your employer may continue to pay for your health insurance benefits for several months or for the rest of the calendar year. If you relocated to take your current job, your employer might also pay for relocation expenses to move back home or to your next job.
Should You Accept a Severance Package in Irvine if Your Employer Offers You One?
When a car insurance company offers you a settlement after a car accident, you are not obligated to sign; you have time to think about whether the amount the insurance company is offering is enough. If it is not, you can have a lawyer negotiate for a better settlement, and in some cases, you might even file a lawsuit. Likewise, if your employer offers you a separation agreement, even if it includes severance pay, you should read it carefully and think about whether to accept the terms of the separation agreement, thereby waiving your right to sue your former employer for wrongful termination of employment, or whether to leave open the possibility of filing a lawsuit, even if it means walking away from a substantial amount of severance pay. One factor in this decision will be your financial situation. It is easier to walk away from a severance package when you have enough household income from other sources to sustain you for several months or more, such as income from your spouse’s job or from a rental property that you own or money in a savings account from which you can afford to withdraw.
The other factor is whether you have grounds for a wrongful termination lawsuit. If the reason your employer gave you for terminating your employment, such as corporate downsizing or a restructuring, sounds like a flimsy excuse, then you should think before you sign. Did your employer really fire you because of your race, gender, or family status, or did the layoff happen shortly after you engaged in a protected activity, such as filing a workers’ compensation claim or requesting an unpaid leave? If you have reason to suspect wrongful termination, you should review the separation agreement with a lawyer before you sign it. You should be suspicious if your employer gives you a short deadline to decide whether to file the separation agreement.
Contact HKM Employment Attorneys, LLP About Severance Packages in Irvine
HKM Employment Attorneys, LLP can help you decide whether to accept a separation agreement and severance package from your employer upon termination of your employment. Contact the employment lawyers at HKM Employment Attorneys LLP in Irvine, California to set up a consultation.
