Getting Laid Off? 3 Tips for Negotiating a Severance Package

You might as well get the largest payday you can.

If you've been following the news, you may be aware that a number of well-known companies have announced layoffs this year. In fact, USA Today recently reported that since the start of 2023, tech companies have laid off almost 95,000 workers, according to data compiled by Layoffs.fyi.

But even if you don't work in the tech field, you can't discount the possibility of a layoff. And if your job ends up on the chopping block, it's important to know how to negotiate the severance package that's presented to you.

One thing you should know is that not all companies offer severance packages. And unless it's written into your employment contract, they generally don't have to.

But if you are on the receiving end of a severance deal, it's important to try to make the most of it. Here are some tactics worth employing in that situation.

1. Don't sign that paperwork right away

This may be a little-known fact about severance agreements, but it's generally in your company's best interest to have you sign one. These agreements typically state that you're not allowed to disparage your employer in any way or otherwise risk financial penalties. And in exchange for agreeing to such terms, you can walk away with what could be a decent payout.

But the longer you go without signing a severance agreement, the more leverage you might gain. That could make it easier to negotiate with your employer.

2. Make sure you're getting paid for unused paid time off

Your severance agreement might come with a lump sum payment you're eager to stick in your savings account. But the more money you're able to squeeze out of your employer, the more financial breathing room you'll have as you look for a new job -- and the less likely you'll be to rack up a credit card balance while you're out of work.

Now, your employer might offer you severance pay equal to a certain number of weeks of salary. But on top of that, make sure that any unused vacation time you've accrued is time you'll be getting paid for. If your company tells you their standard practice is to offer severance equal to four weeks of pay, but you have 10 days of vacation time you accrued but didn't use, ask for six weeks' worth of severance.

3. Consult an attorney

Chances are, your company has a legal team that put together its severance package and agreement. To level the playing field, you may want to consult an attorney of your own. A professional who has experience with employment law can tell you if your severance package is fair, and can also alert you to rights you may be signing away but shouldn't.

Also, once you get a lawyer involved, your employer might realize you truly mean business. They may be willing to give you more money to wrap matters up as quickly and painlessly as possible.

Being laid off from your job can constitute a huge blow. And so it can be difficult to take a level-headed approach to negotiating a severance package. But if you push through the mental upheaval, you may find that you're able to walk away with a much better deal than the one your employer initially offers. And that could help ease the sting of a layoff to some degree.