Severance pay is part of some employment separation packages. It is financial compensation for the employee in return for the employer’s security of not being sued for wrongful termination as well as potential non-compete and non-disclosure contracts. When faced with a layoff, too many Kansas City employees sign the first separation agreement that is put in front of them, severely limiting their severance packages. While losing your job is stressful, and there are undoubtedly many things going through your head at this moment, such as how you are going to cover the mortgage or where and how you will begin your job search, we encourage you to give serious thought and consideration to your severance package.
Why You Need Adequate Severance Pay
An “income shock” is anything that disrupts a person’s income by 10% or more, and it can be attributed to a drop-in health, the death of a loved one, the loss of a job, or anything else that negatively impacts income for one or more years. According to Time, researchers found that 61% of all American workers spent at least one year without any income by the time they reached the age of 70, which is certainly a large income shock. One out of four of these people went through at least four one-year periods of joblessness, which significantly impacted their retirement savings. The average loss was $25,000 for these people. Every time someone loses a job, statistically it becomes harder for that person to find a new job with equal pay. So, they may spend months on end without any income only to find a job that did not pay as much as their original job. Researchers with the Hamilton Project report that workers in their 50s who lost their jobs in the Great Recession will end up losing $112,100 in wage reductions (of 19%) over the 25 years after they originally lost their employment, according to the Atlantic.
What Does Your Employment Contract Say?
While there is no law that says that employees have to give severance pay to all employees, if it is in your employment contract or in the policy handbook, severance pay is something that your employer must deliver on. Similarly, you are entitled to severance pay if it has been promised to you in word or in writing. An attorney will help you enforce what you have been promised and will help you maximize the dollar amount that you leave with. While your employer may or may not have been fair to you during your term of employment, that is no reason why you should not pursue you and your family’s own best interests in this matter because that is exactly what your employer is doing by denying or limiting your severance pay.
A Severance Pay Attorney is Here to Help
All severance packages deserve to be looked over by an attorney, and no package is so ideal that it is too good to be negotiated over. An experienced severance package attorney with HKM Employment Attorneys will go over your severance package closely and come back to your employer with a counter offer that is in your best interest. After all, you do have a bargaining chip to play with and it should certainly be used at this time. Call the Kansas City attorneys of HKM Employment Attorneys today.