Today, everything is so expensive that having a salaried job is not enough to protect you from financial stress. Sure, you are in a stronger position than people whose only source of income is freelance gigs, and you are more secure than hourly workers who do not know how much they are going to get paid each week until the manager posts the week’s schedule. If you have worked at your job for a long time, you may not make enough money to afford luxuries, but you can at least be sure that you will be able to pay your bills next month, even if there is very little money left over after the bills are paid. If your employer suddenly dropped you from the payroll, you would be in a bad financial situation. Employers know this, and sometimes, in the face of layoffs or corporate downsizing, they offer employees a going away present known as a severance package.
Getting a severance package feels a lot like getting coal in your stocking, but how bad it actually is depends on what the feasible alternatives are. In many cases, employers are within their rights to terminate the employment of workers who are in good standing. In some cases, though, the severance offer is a way of getting the employee to go away quietly at as little cost to the employer as possible, like in A Tale of Two Cities, where the king’s carriage runs over a child, so the king throws a coin out of the carriage to compensate the parents, and the carriage continues on its way. The San Francisco severance lawyers at HKM Employment Attorneys LLP can help you if your employer has terminated your employment and offered you a severance package.
Severance Pay From a Former Employer is as Bittersweet as Alimony From an Ex-Spouse
No employer will offer you severance pay when you quit. If you complain about your working conditions and threaten to quit, your employer might offer you a pay raise in order to convince you to stay, but if you terminate the employment relationship, your employer has no obligations to you other than to pay you for the time that you have worked. This is true if you are employed on an at-will basis, meaning that you do not have an employment contract. If you have a contract and you want to quit your job before the end of the contract period, you should follow the early termination procedures listed in your contract, or else your employer could sue you for breach of contract.
In an at-will employment relationship, the employer is free to fire the employee at any time and for almost any reason. If the employee has been working there for a long time, the employer might offer severance pay when laying off employees in order to help them cope with unexpected job loss. This often happens when an employer must reduce its workforce because of a corporate merger or major financial setback. Many employment contracts specify that the employer must pay the employee a severance package if the employer terminates the contract before the contract period has elapsed.
With or without an employment contract, losing your job is stressful. A severance package, where your salary and health insurance continue for several months even after your job ends, is less stressful than your job ending with an abrupt cutoff of your income. The idea is that the severance package will cover your expenses for several months while you interview for new jobs.
What Determines How Much Severance Pay You Get in San Francisco?
Most of the time, employers calculate severance offers based on the employee’s salary. For example, the severance package might include three months’ pay, either as a lump sum or paid out in installments. If your employer’s policies allow you to cash out unused vacation pay or paid sick leave, then you also get this when your employment ends, whether or not it formally counts as part of the severance package. Employers will also continue to provide health insurance benefits for several months after your last day of work.
While severance packages vary, the amount is always more than nothing and less than it would cost your employer to settle a lawsuit if you sued for wrongful termination of employment. Therein lies the catch. Unless the severance package is part of your employment contract, then in order to receive the severance pay, you must sign a separation agreement. One of the provisions of the separation agreement is that you promise not to sue your employer for terminating the employment relationship.
How Should You Decide Whether to Accept a Severance Offer in San Francisco?
Before you decide to sign a separation agreement and accept the severance package, you should think carefully about whether you have grounds for a wrongful termination lawsuit. If hundreds of employees at your company are losing their jobs, then the termination of employment is probably inevitable, and the separation agreement with the severance package is probably the best-case scenario. Even if this is the case, it might be worthwhile to try to negotiate for more money as part of the severance package before you sign.
If you think that the termination of your employment is a matter of discrimination or retaliation, then signing the separation agreement may not be the best choice. Are you the only one losing your job in the so-called corporate restructuring? Do all of the casualties of the so-called corporate downsizing share a protected characteristic, such as the same race or all being the mothers of young children? Did the severance offer suddenly appear after you complained about the way your employer treats you or after you requested accommodations for a disability? If this is the case, you should discuss matters with an employment lawyer.
Contact HKM Employment Attorneys, LLP About Severance Pay in San Francisco
The San Francisco employment lawyers at HKM Employment Attorneys, LLP can help you if your employer is terminating your employment position and has offered you a severance package. Contact the employment lawyers at HKM Employment Attorneys LLP in San Francisco, California, to set up a consultation.