Author: Elizabeth Kuzila; MBA Candidate. 15 years in the Apparel Industry.
I was caught off guard when my colleagues and I were laid off without warning in October 2022.
Recently, layoffs are in the news almost every day. The loss of stability and work identity, your vacant calendar, and the grueling prospect of looking for a new job can feel overwhelming. If you, like me, find yourself in shock from being laid-off, it’s helpful to know what to expect.
Major layoffs require WARN act notices which is a 60 day notification period before your salary and benefits can stop. Many employers provide a payment in lieu of the notice.
Firstly, if you've been offered a severance package, congratulations. Although federal law doesn't mandate severance, the only state that does is New Jersey, Many employers elect to provide it, the terms for your severance should be in your employee handbook.
Severance is a compensation package offered to employees upon job termination. While the specifics vary, it commonly includes elements like a lump sum or salary continuation, extended healthcare coverage, and sometimes additional perks.
Understanding Your Package: It's imperative to meticulously review the terms of your severance agreement. This legal document outlines what you're entitled to, ensuring you're fairly treated. Elements to focus on include:
- Financial Compensation: This typically involves a lump sum based on your tenure, position, and salary. Your severance pay will be subject to taxes. In addition to what will be receiving as a severance payout, some employment agreement may pay for untaken vacation and sick days you accrued but did not use.
- Healthcare Coverage: Many companies extend healthcare benefits beyond your employment termination date and an option for COBRA once that coverage is up. if your employer isn’t covering your healthcare past the end of the month you were let go in, it might be worth it to you to ask for another month or two to cover what you need to get done.
- Vesting of Stocks: If you have unvested stock options or restricted stock units (RSUs), understand how they will be treated.
- Outplacement Services: Some firms provide career transition assistance, such as resume writing and job search support.
- Non-Compete and Non-Disclosure: Be aware of any clauses that might impact your future job prospects.
Before you sign your severance agreement, make sure you understand the details and are comfortable with it. Don't hesitate to negotiate aspects of your severance package. If certain terms seem unfavorable or if your situation warrants it, ask for modifications. Consult legal or HR professionals if needed, ensuring you're making informed decisions.
Setting yourself up at the beginning of the process will help you feel grounded. I know that, as part of my journey, checking off these boxes helped me address a lot of the anxieties I had around what’s next. You got this!