A severance agreement is a legally binding contract that outlines what happens when an employee leaves the company. Generally, by signing the agreement, you give up your right to pursue legal action against your employer. In exchange, your employer might offer severance pay, a continuation of health insurance, and other benefits such as outplacement services.
When is Severance provided?
In Florida, unless there is an employment agreement that provides otherwise, an employer is not legally required to offer an employee severance pay. However, severance is usually offered to employees affected by major changes that are outside their control, such as layoffs or mergers.
What should the Severance Agreement include?
Ideally, severance packages should help you bridge the gap between jobs by providing continued benefits or contributions that can cover your lost wages and benefits. It may include:
- The dates of employment (hiring and termination) and any timelines related to benefits.
- The severance pay, as well as compensation for unused paid time off or vacation benefits unless otherwise precluded under the company’s policies.
- Payment of health insurance premiums under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for some period of time, usually concurrent with the severance pay period.
- Early retirement bonuses or financial incentives for employees that are close to retirement eligibility.
- Outplacement services that provide career transition support, such as resume assistance, job search coaching, and networking resources.
Take note that the specifics of a severance package can vary based on company policies, employment contracts, and individual circumstances.
You deserve proper compensation
Severance agreements often include a general release in favor of the employer, and signing it means you waive the right to bring any claims.
It is highly recommended that you seek out the guidance of a qualified and experienced employment attorney to review the separation agreement offered by your employer and to determine whether you have viable claims that you might be forfeiting by signing the agreement.