If you’re transitioning out of a job in Florida, a severance package can help alleviate financial strain. It’s essential to understand the terms, especially if your employer asks you to sign a “release of claims.”
Understanding Severance Pay
Severance Pay Is Not a Legal Requirement:
Employers in Florida do not have to provide severance pay by law. They may offer it voluntarily. Most severance agreements follow company policies or result from individual negotiations.
Why Employers Offer Severance
Purpose Behind Severance Offers:
Many employers offer severance packages to obtain a “release of claims” from the employee. In this release, the employee agrees not to sue the company for potential claims, such as wrongful termination, discrimination, or unpaid wages.
What to Look for in a Severance Agreement
Key Components of Severance Agreements in Florida:
A standard severance agreement often includes more than just severance pay. It may also have terms related to health insurance continuation, non-compete clauses, confidentiality agreements, and non-disparagement clauses. You should understand each element before signing.
Legal Consequences of Signing a Release
Consequences of Signing a Release:
When you sign a release of claims, you give up your right to sue your employer for issues like discrimination, harassment, wage disputes, or wrongful termination. Most employers require this condition for receiving severance pay. Ensure that the severance compensation justifies the rights you are waiving.
Negotiating a Better Severance Package
You Have the Right to Negotiate:
If you believe the severance offer is insufficient or you have potential claims, you can negotiate for a better package. This might include higher compensation, extended benefits, additional outplacement services, or other favorable terms. Negotiating is common, especially if you have leverage, such as a potential legal claim.
Time to Review and Reconsider Severance Offers
Timing and Consideration Periods:
The Older Workers Benefit Protection Act (OWBPA) requires employers to give employees over 40 years old 21 days to consider the severance agreement and 7 additional days to revoke their acceptance after signing. This federal law affects severance agreements in Florida too.
The Importance of Legal Advice
Consult with a Lawyer:
You should consult an experienced employment lawyer in Florida to understand your rights and options before signing a severance agreement. A lawyer can help ensure the agreement is fair and may identify potential claims that could affect negotiations.
Financial Considerations
Tax Implications of Severance Pay:
The IRS considers severance pay taxable income. You should understand the tax implications, including whether a lump sum payment or installment payments might be more beneficial for your tax situation.
Before you agree to any severance terms, make sure you know your rights, understand all components of the agreement, and consider seeking professional legal advice. If you have questions about severance negotiations, please contact the experienced attorneys at Hoyer Law Group for a consultation.
