Getting laid off can be a stressful and uncertain time. While the initial shock subsides, one crucial question arises: what about severance? California, known for its progressive employment laws, offers some protections during severance negotiations. Understanding your rights and leveraging them effectively can make a significant difference in your financial security during this transition.
What is Severance Pay?
Severance pay is a form of financial compensation offered by some employers to employees who are being laid off. Unlike mandated benefits like unemployment insurance, severance is not a legal requirement. However, it is a common practice, particularly in larger organizations, to offer a severance package to show goodwill to departing employees or to remain competitive in the job market by attracting and retaining talent. The amount of severance pay typically varies based on factors such as the employee’s position, salary, and the company’s specific policies. Negotiations often play a role in determining the final severance package, making it crucial for employees to understand their rights and options during this transition. While severance provides a welcome financial cushion during the job search, it’s important to remember it’s not a substitute for future income.
Can You Negotiate a Severance?
Yes! In California, severance negotiations are very much on the table. The state doesn’t mandate severance pay, but it’s a common practice, especially during layoffs. This means you have the right to discuss and potentially improve the terms of your severance package. California law protects your ability to review the agreement, consult an attorney, and propose changes. This window of opportunity allows you to negotiate for a more favorable outcome, potentially increasing the severance amount, extending benefits continuation, or modifying restrictive clauses like non-compete agreements.
California employers cannot pressure you to sign a pre-drafted agreement. You have the right to review the terms, consult with an attorney, and propose changes. California law also mandates that employees over 40 be given at least 21 days to review the agreement before signing. This allows ample time to understand the terms and implications. After signing, you have seven days to change your mind. This “cooling-off” period allows you to reconsider without feeling pressured.
Key Elements of a Severance Agreement
Now that you understand your rights, let’s explore the key elements commonly found in severance agreements:
- Severance Pay: The amount of money you’ll receive upon signing. Negotiation points may include the calculation method (based on salary, tenure, etc.) and the number of paychecks it covers.
- Continuation of Benefits: The agreement may specify continued health insurance coverage for a set period. Negotiate the duration and your responsibility for premiums.
- Outplacement Services: Some employers offer career counseling or job search assistance as part of the severance package.
- Non-Compete Clause: This restricts your ability to work for a competitor for a specific period. These clauses are often negotiable, especially regarding the scope and duration.
- Non-Disparagement Clause: This limits negative comments about the employer. Negotiate the extent of limitations and carve out exceptions for truthful statements.
California-Specific Considerations
California law prevents severance agreements from waiving certain employee rights. These include:
- Right to File for Unemployment Insurance: A severance agreement cannot prevent you from filing for unemployment benefits if eligible.
- Right to File Wage Claims: The agreement cannot waive your right to pursue unpaid wages or other compensation.
- Public Policy Claims: You cannot waive the right to sue for discrimination, harassment, or other violations of public policy.
Don’t Go It Alone
Severance agreements can be complex and overwhelming to review. An experienced employment attorney can ensure your rights are protected, analyze the agreement for potential pitfalls, and guide you through the negotiation process.
If you’re facing a potential layoff and severance negotiations, the Law Offices of Corey A. Pingle can help. We understand the legal nuances of California employment law and are committed to advocating for your best interests during this challenging transition.
We have over 150 five star reviews with millions of dollars in settlements. We believe that everyone should have access to legal representation. This is why we offer free consultations and have a no win, no fee guarantee with zero up front costs.
Contact us today for a free consultation to discuss your situation and explore your options. Remember, knowledge is power. With the right legal guidance, you can secure a severance package that reflects your contributions and provides financial security during your job search.
Phone: 714-593-2306
