Financial Planning for Generation X & Y Women
 
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Expert Q&A Archive

05/18/2009
Is it possible to negotiate severance pay?
I am expecting a three-month severance pay. Is it possible to negotiate severance pay?
Susan Garcia:
expert info »
Can you negotiate a severance? YES ! You can negotiate the amount, whether it can be paid in lump sum or via regular paycheck, when to start and to end it, benefits included and extending
health care benefits. Remember, everything is negotiable.

Delores Lenzy - Jones, CPA, CIA:
expert info »
Absolutely! It can't be wildly different from what's offered, but you can certainly ask for more. If you're in a protected group like being female, minority, over 40 years old, or a person with disabilities, you certainly have more leverage. I would recommend asking for a minimum of one year's pay and benefits. If you've worked for a company 10+ years, then I would recommend asking for even more. You may not get exactly what you want, but you can certainly gain more than you ordinarily would have. Nothing ventured, nothing gained. Go for the gusto!
Rebecca Schreiber CFP®:
expert info »
Sometimes it is possible to negotiate severance pay. If you work for a large company that is letting go of hundreds of people, there may be little to no negotiating room. If you work for a small business, however, there may be more leeway. Ask your HR director if you can negotiate for longer health insurance coverage or to make up any money you may have lost in your Flexible Savings Account. Also, if you were let go right before completing the vesting period of your retirement account (where you get to keep the employer's contribution), ask them to throw in the company match.
Gail V. Marquet:
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You could try, but most companies have a policy for setting severance (e.g. one week's severance for each year of employment). If you have been an outstanding employee, you may have some leverage, but it's probably unlikely.
Connie K. Marmet:
expert info »
In rare circumstances, severance can be negotiated. If you are close to retirement, some employers have provisions to bridge you to retirement if a number of requirements are met. The actual date the severance starts may be negotiable if you are involved in a critical project that needs to be completed. In general there's not a lot of flexibility in layoffs because all individuals affected must be treated consistently. It's worth exploring if you feel that there are work-related (versus personal) circumstances that could objectively weigh into the decision on when you are terminated. The amount of severance is rarely negotiable. The only exception I can think of is when an employee was previously employed and tries to make a case that the earlier employment should be considered in determining the length of severance.

[Editor’s Note: Information on severance pay can be found on the Web site of the U.S. Department of Labor at www.dol.gov/dol/topic/wages/severancepay.htm.]