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Negotiating severance agreements and employment contracts

| Jul 9, 2021 | Wage And Hour Disputes

You may be excited to take on a new employment position in Hawaii, but don’t forget to negotiate an advantageous position for yourself in case the company folds. At issue are severance agreements and employment contracts.

A severance agreement relieves stress

When you know ahead of time how you and the company will part ways, you will not feel the stress that comes from a sudden job loss. The agreement spells out issues relating to finances, benefits and assistance with securing a new position. As a general rule of thumb, you typically have 21 days to accept the package your company offers you. It may be beneficial to decide ahead of time what is in it.

Everything is up for negotiation

While typical severance pay is one week of salary for every year worked, you might negotiate something different. Start at requesting five weeks of salary for each year worked, and allow yourself to negotiate down.

COBRA allows you to pay for the health insurance you had in place with the company. However, it is quite expensive. Negotiate a clause that will have the company continue your insurance for at least a month. It saves you money and might allow you to find less expensive coverage to take over when the policy runs out.

Include tangible goods in your employment contract or severance agreement

Are there any company perks you enjoy? Examples include a laptop, company car, cellphone or membership in an organization. If you want to keep one or all of these perks, add them on to your severance agreement or employment contract. While your employer might not be willing to let you have everything, they might be willing to let you keep some items.

If you are in doubt how to structure the negotiations, consider talking to a law firm for input. An employment law attorney may help protect your interests.