What to look for in a severance package

by | Oct 30, 2020 | Uncategorized

It can be hard to leave a job, particularly if a Louisville resident has been with their employer for a long time. While some individuals choose to leave their careers to embark on new adventures, others may feel as though they are being pushed out of their jobs and into early retirement. Others may simply be let go because of internal processes of their employing entities.

When a worker is let go, they may be offered a severance agreement. This post discusses general terms related to severance agreements but does not offer legal advice. All individuals who have severance agreement questions should direct them to Kentucky-based employment law attorneys.

What is a severance agreement?

A severance agreement is a contract between an employee and their employer. It details the terms of the employee’s exit from working for their employer, and the compensation or benefits they may receive as a result of their exit. In order to receive a severance package (the compensation or benefits offered in the agreement) the employee usually must relinquish their right to sue their employer for wrongful termination and other causes.

Not all individuals will be offered or will receive severance when they are let go from their jobs. Many factors can influence if and how a severance package is addressed at the end of an individual’s employment.

Factors that can influence severance agreements

Severance agreements are not universal throughout industries and occupations. Before a severance agreement is offered to an employee many considerations will be made. Some of those considerations may include:

  • How long the employee worked for the employer
  • What position the employee held
  • Whether the employer is continuing operations after the employee’s exit
  • The terms of the employee’s exit from the employer

It is important that an employee understands what rights they have and what they may waive when they sign an employer-prepared severance agreement. Before entering into a severance agreement, an individual can have their trusted employment law attorney review it and explain its terms.