Getting paid to leave your job? It might sound impossible, but that’s exactly how severance works.
Though it’s not required by law, employers often offer benefits to laid off employees on their way out.
Why? Sometimes it’s an expression of gratitude to loyal employees. Other times, it’s to attract top talent.
Either way, severance can ease the loss of a job. It can give you a financial cushion when you’re seeking a new position.
Severance comes in several forms…
It’s exactly what it sounds like—your paycheck continues after you leave. Sometimes, this is based on the number of years you worked for the company.
COBRA continuation allows you to keep your health insurance for a limited time after leaving your job. If your severance agreement includes this, your employer may pick up the tab for the first few months. But eventually, you’ll be responsible for the entire premium.
These can help you find a new job. Services can include résumé writing, interview coaching, and job search assistance.
Vacation or sick pay. If you have vacation or sick days left over, your employer might pay you for them as part of your severance package.
If you’re vested in a retirement plan, you may be able to keep your benefits or cash them out.
Severance pay is often negotiable. If you have a good relationship with your employer, they may be willing to give you more than the minimum. And if losing your job will cause economic hardship, you might be able to bend the ear of your employer to get additional benefits.
It’s worth noting that severance pay only kicks in if you get laid off. Getting fired or simply quitting won’t trigger your benefits. Sometimes, you can negotiate a layoff with your employer in exchange for training a new employee.
Whether you’re just looking for a few more benefits or you want to get paid if you leave your job, understanding severance can help you get what you’re after. Know your needs, and negotiate accordingly.