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Knowing Severance Package Offers, Choosing the Right Benefits

By: Darren Agaton

Changes in economic conditions sometimes have drastic resulting effects on many companies. More likely, because of these changes, a company will be forced to downsize its workforce. However, some employers offer severance package negotiations to their departing employees to help them recover from the sudden loss of work and income.

Severance Package is a payment and benefits given to employee when they leave employment at a company. Typically, this is a two-week pay for each year a person has served or worked in a company.

Additionally, severance package are not obligated by law. Providing benefits is optional and it may differ depending on the employer�s policy.

Severance Package Offers

Usually, the following are included in the severance package:

� Severance Pay

This may range from 2 weeks up to 6 months or more at your recent salary. Additional are your sick leaves, unused vacation, accumulated bonuses and even floating holidays.

� Outplacement services

Payment to provide a relief to a severed employee would not be enough especially if he is the provider of the family or the main source of income. This is the reason why outplacement services are included in the severance package.

Outplacement service is one way of replacing your lost job. Your ex-employer will not find a job for you. He would otherwise help you find one. It will be through a recommendation he will give you to add credibility and reliability for any possible employers in the future.

Your ex-employer may also grant you to use some of the facilities in your former workplace and he may provide you a free access to computers, printers, fax machines, telephones.

Moreover, he could also offer you job trainings, seminars and workshops that will be helpful in boosting your confidence and ability to work.

� Separation Agreement

This is a contract consists of an outline of the terms of separation which includes an agreement that you will not reveal or disclose the trade secrets of the company or hold the company accountable for terminating you. Signing in for a separation agreement will grant you a better severance package.

� Health Insurance

The coverage provided by employers may end once you are laid off in the company. However, the Consolidated Omnibus Budget Reconciliation Act (COBRA), a U.S. law, gives you a right to continue your existing coverage at group rates and additional 2% administration fee.

Your ex-employer will include the papers and instructions in the severance package if you are qualified. He might pay the first two months for you but more likely, you will be the one to pay thereafter.

� Disability Insurance

Under the state disability insurance plan, you are still entitled of benefits even if your former employer did not offer you a prolonged option in the severance package. These benefits however are limited and the amount is lesser as compared to the employer-provided plan.

� Life Insurance

Life insurance coverage provided by your employer might also end on the day you are laid off or after. But, as part of the severance package, your former employer may pay it for months and you are given the option to continue, provided if you want to.

Other employers also include retirement plan: stock options, if you want to become a stockholder of the company and other unemployment benefits in the severance package.

Whatever amount of payment or benefits you may receive it is good to negotiate with the best severance package that your employer provided. You must also be assured that the severance package negotiations are credible, fair and reasonable.

Also, before signing any agreement, you must thoroughly investigate what is included and written and make sure that it will legally protect your rights and interests.

Article Source: http://bytepowered.org/articles

To help you deal with business issues such as severance package agreement and other concerns, consult with our skilled Los Angeles attorneys. Visit our website and avail of our free case analysis.

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