Do you get severance if you get fired? – To answer simply, in most cases, employers do not offer severance packages for employees whom they fire. However, on the sunny side, some employers do. In a few cases, fired employees are eligible to receive severance pay. Once you cool down from the sudden shock, you can ask your HR whether the company can consider providing severance pay to you or not.
In this article, you will learn about the general details of severance pay and whether fired employees are eligible to get severance pay or not. You will learn here what are the constituents of severance packages that are meant for fired individuals. Finally, we will share some tips with you where you will learn about how to get severance pay from your employer once you are fired. Hence, read on to find out more.
What Is Severance Pay?
An article on Investopedia defines Severance Pay as
“the compensation and/or benefits an employer provides to an employee after employment is over. Severance packages may include extended benefits, such as health insurance and outplacement assistance to help an employee secure a new position.”
In most cases, employers offer severance packages to employees who are laid off or who got terminated because of restructuring of the company or for those who retire. In some cases, the company might provide severance pay to fired employees or to the ones who resigned from the company.
Employees offer severance pay as a goodwill gesture so that the pay creates a buffer for the employee’s gap due to unemployment until the employee gets a job.
Do You Get Severance If You Get Fired?
The Fair Labor Standard Act, as per the US Department of Labor, does not make it compulsory for employers to pay severance pay to an employee. However, a business might pay severance to employees out of goodwill or to avoid further problems.
According to TheMuse.com,
“An individual employee who’s fired without notice may receive it too, but it’s highly discretionary.[…] a company may offer it in exchange for getting you to agree you won’t sue for things like discrimination, unpaid wages, or wrongful termination. Or it might offer severance pay on the condition that you sign a non-disparagement clause.”
An employer mostly offers severance pay to employees who they lay off, that is, an employee who loses his/her job that is beyond the employee’s control. However, if an employee is fired, there is nothing wrong with asking whether the company can offer severance. If the company can, they can surely offer the employee a severance package.
Severance Package For Fired Employees
According to Indeed.com,
“These policies vary by company—usually, they offer severance pay to laid-off employees. Some companies may also offer severance pay to fired employees if it could help ease the transition. For example, employers may offer a severance package to diminish the potential of having a lawsuit filed against them.”
The following are the major constituents of a severance package for employees:
- Payment through continuation of the salary or a percentage of the salary.
- Continuation of the insurance benefits.
- Unemployment benefits within the agreement.
- Job assistance
What Steps Can You Take To Get Severance After You Are Fired?
To get a detailed and step-by-step understanding of how to negotiate a severance package, consider reading the article by clicking on the given link. However, we have included in brief the steps you must take if you want to receive severance pay from your employer:
1. Have A Meeting With The HR
Once you come to know that you are fired, you must have a meeting with HR or even the employer (with whom you can have a meeting) and ask them to state the reasons for this step.
Make sure that you have a clear understanding of the reasons for which they have decided to fire you. These reasons will give you a likely idea of whether you can receive a severance package or not.
2. Ask About Severance Pay
If your employer does not mention a severance package for you, you can ask whether you are eligible to receive one or not. Employers are not bound to offer a severance package to employees, especially if the employee is fired unless it is written in the employment contract.
However, some employers still do not hesitate to offer a severance package to employees so that there is a smoother transition. They sometimes do this to avoid lawsuits and claims from the employee’s end.
3. Review The Package
Once the employer/HR agrees to provide you with a severance package, you will need to take the time to review it. You will need to check here whether the severance package meets your needs until you get your next employment. The employer will give you a deadline within which you have to sign the severance agreement that you agree with those terms.
4. Negotiate The Severance Package
If you somehow feel that the severance package does not meet your needs or the employer could have given more, then do not hesitate to negotiate. Try to negotiate yourself rather than immediately bringing in a lawyer. Review your own priorities, and based on that, you will need to seek additional pay or additional benefits the employer provides you.
Do you get severance if you get fired? Hope you have found a helpful answer to this question by reading this article. Employers offer severance pay to employees at the end of employment so that it gives relief to employees until they get another job. However, employers are not required to pay severance compulsorily if it is not available as per the company’s policies.
In most cases, employees who are fired are not eligible to receive severance pay. However, some companies, as per their policy states, offer severance pay to fired employees or resigning employees. Hence, if you are fired from your job, you can ask the HR department about whether you are eligible or not. Share your thoughts about this matter in the comments section below.
A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.