The
secret of writing severance agreements in the employer's
favor
So, you've decided to fire your problem employee. What
happens now? Well, besides officially letting them know
you have terminated them, you will now need to negotiate
severance agreements. Keep in mind that this is an area
where the former employee can take advantage of you. It
helps to know what you must do for severance agreements
and what is optional. Remember every situation is different.
Even though some offerings like severance pay are not necessary,
they make the termination process go much smoother.
Consider Why You Are Firing Them
The types of severance agreements you may offer your employee
will have a lot to do with the grounds for termination.
If you lay them off due to a company restructuring, they
will leave on better terms than if you fire them for violating
company policy. The reasons will affect the types of severance
agreements you will negotiate. No laws require you to offer
severance pay. However, you may choose to if the termination
had nothing to do with the employee's performance.
Severance Agreements Basics
To develop the best package of severance agreements, it
helps to hire a lawyer. Severance packages are legal documents
and it may take a specialist to get the jargon correct.
Each company has its own policies on severance agreements.
Some offer severance pay, others offer other benefits,
and still others will only allow a former employee to get
severance if they promise not to sue the company.
When you are working with the lawyer, it helps if you
have a clear idea of what you want to include in the severance
package. Do you want to offer a benefits package and a
certain percentage of pay? It is also a good idea to outline
who will be eligible for the severance plan. You can specify
a clause that if an employee is terminated for certain
reasons, than they will not be eligible for any severance
benefits.
Understand Where You Stand
Your attorney will help you understand the legal implications
of the severance plan that you have in place. Even if you
have a standard written package, using it to fire specific
employees can get complicated. Before offering a terminated
employee any severance agreements, contact your lawyers
or legal department to get advice on how to proceed. It
may help to have them present at the termination meeting.
Why Have a Severance Plan?
There are a few benefits to having a severance plan. First,
it helps alleviate any harsh feelings your terminated employee
has toward the company. A severance plan gives them an
opportunity to search for a job while still getting paid.
That way, they can still provide for their families. It
helps foster a sense of goodwill that will help the overall
moral of the company.
What
you may be missing before firing any employee
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