The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Slee_stack on November 01, 2018, 03:24:33 PM
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I've just been informed that my last day is in early December.
I've been with the company for 8+ years. Currently I'm in a Lead Engineer role. I used to be in a Supervisory role but have not been for the past year. I was told this is not because of performance, but just that we have multiple individuals overlapping on projects. Essentially, my position is being eliminated.
I've been given an initial severance offer of (2) months paid Cobra and (8) weeks of salary.
They want me to help transition and of course sign a disclaimer not to sue.
I'm starting to read up on severance negotiations but wanted to poll the audience here as to what might be a target of weeks pay to ask for.
I was thinking about asking for 16 weeks, or double what was offered.
As an aside, I feel a little worried but also very excited. I've been on the cusp of FI for awhile now and was sort of hoping I'd be offered an incentive to be booted out the door.
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Sorry about this.
I have read that 2-3 weeks for every year is standard. I would ask for 16 or 24 weeks pay.
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My company at one point was offering in the ballpark of 2 weeks for every year with the company. Though I don’t think medical was included. 16 weeks would not be unreasonable.
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One week per year of service is very low. Everywhere I have seen is typically three weeks per year, with a minimum number of weeks for those employees with only a few years.
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Do you care about Cobra? If they let you go in early December, you're good for the whole month, then can go on an ACA plan in 2019 for peanuts since you'll be retired.
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Here the minimum is 1 week per year of employment. The laws tend to favor a severance that reflects the ability to get a similar job in the marketplace. So, a manager or supervisor who is well paid, may get 2 or even 3 weeks per year (if they were around 5 years).
BUT!!
I worked for a projectized engineering company. All of their standard offer letters when hired indicated that the severance at the end would be 1 week per year of employment. We also had to give 1 week per year of employment as notice (it worked both ways). Several times the low severance was challenged by terminated employees, but the offer letter always stood up. e.g., I had a lead manager / engineer type, with 25 years experience but only 4 years with the company, who only got 4 weeks, challenged, and lost because of the hiring letter.
So -- read your offer letter again because it may say something about this.
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what industry are you in? and would you take the Cobra for longer instead of more severance? This may be considered cheaper by a company with no budget for "severance" but a budget for health care expenses!
also, if they asked for you to help transition, can you drag out that transition period?
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Are you in USA? if so, how can you negotiate severance at all? They don't need to give you anything....
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Are you in USA? if so, how can you negotiate severance at all? They don't need to give you anything....
This is what i am wondering as well. My employer also has 1 week per year even though it is not a requirement. I suppose if they are scared of the employee suing (and if they have anything to sue for) then they may negotiate.
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Are you in USA? if so, how can you negotiate severance at all? They don't need to give you anything....
This is what i am wondering as well. My employer also has 1 week per year even though it is not a requirement. I suppose if they are scared of the employee suing (and if they have anything to sue for) then they may negotiate.
Exactly, if it's in the employment agreement then there's an obligation to pay severance. If it's not, the leverage for negotiating a settlement is the threat of a lawsuit or just notifying regulators. I keep a list of state and federal law/regulatory violations by my company so that if I need negotiating leverage I'm ready to go. Employers have basically no loyalty, so you have to do this kind of messed up strategy. Recommend reading the financial samurai e-book on negotiating severance.
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I have no thoughts on negotiating the severance, but I see you will have made it through November, so good job there! Sounds like timing is about perfect for your original goal.
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Thanks for all the input!
I realize negotiating definitely sounds funny. Obviously, I'm just trying to maximize whatever $$ I can leave with.
I'm leaning towards the 'it never hurts to ask' camp with this.
I realize I probably have little leverage. However, there is the signed agreement they get that I won't sue for any reason. Age could factor in.
They also get the minor benefit of me not speaking negatively of them. I was involved in a lot of their recruiting at the local university. I still am in occasional contact with younger hires and folks that would consider the company in the future.
And then there's the transition (training) stuff too.
I'm putting together a response that basically says that I hope I can be as positive towards the company after departing as I have been my whole career there. The company likes to view itself as an above average workplace. I'm trying to sell them that it would go a long way to make a severance offer that is 'at least average' as well of 2 weeks per year.
I have no verbiage about anything being limited per some prior (hire) agreement. It looks on the surface that everything is negotiable.
The current severance offer provides 2 months of Cobra and 8 weeks pay after departure date (in lump sum).
I'd like to end on a cordial note because one never knows if a chance to consult or contract for them could come up. I could totally see them having no one to turn to to address something obscure that no one else knows. I wouldn't mind some high dollar hourly pay from them thrown at me in the future.
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I have no thoughts on negotiating the severance, but I see you will have made it through November, so good job there! Sounds like timing is about perfect for your original goal.
Yes, this part made me quite happy.
The being forced out part still makes it somewhat awkward as I also was hoping DW and I could FIRE together. I'm fairly certain I'll get some other kind of job in the interim so I don't feel guilty about it. DW wants to go some more years before pulling the plug for more security. She doesn't love her work and I don't want any resentment to build. I just need to find some job that is easier and less time consuming. PArt time would be amazing.
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You can ask, but its pretty unlikely a company will make an exception to normal practice. If they give you a deal and not the next person the company opens itself up to a discrimination lawsuit.
I found myself in the same boat as you last week. Terminated with a request to transition over 2 weeks in order to receive a severance package. I was able to push out when my health benefits would end and keep my company cell phone, but the company did not budge on $$$.
The other factor is the strength of the company. I am getting laid off due to a downturn in business and cutting expenses. The company does not have a lot of extra cash to pass out now.
Good luck to you. I hope you were quietly celebrating as I was when the door got closed for 'the meeting'.
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Here's a good book to pick up:
Don't Sign Anything: A guide for the day you're laid off
https://www.amazon.com/Dont-sign-anything-guide-youre-ebook/dp/B07H7RFYRC (https://www.amazon.com/Dont-sign-anything-guide-youre-ebook/dp/B07H7RFYRC)
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oh no, negotiating doesn't sound funny. Most people wouldn't have the balls to do it, but if you approach it right, you might find what you can give your old overlords that they are willing to overpay for.
To be realistic, I don't think you'd get much in the USA but its worth trying. A long transition period seems most likely.
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Your ability to negotiate severance will depend on (i) the degree to which they will be worried if you refuse to sign the release (i.e., do you have a legitimate discrimination claim); (ii) company economics, and (iii) the extent to which they have a "policy" and stick with it. No harm asking, but adjust your expectations according to your own assessment of the risks/benefits.
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I wrote a short, but respectful note talking up the company and positive history we've shared. I also asked from an increase of the 8 week offer to 18 weeks.
I got a response with phrases like 'this is standard', 'we aren't obligated to give anybody anything', 'we give folks with longer tenure less', etc.
They did acquiesce a little and gave me a bump up from 8 to 12 weeks of pay. They also were firm in stating this is a final offer.
All-in-all, I view it as a small win. I really had nothing to lose by asking (respectfully).
I didn't spend much time drafting the note (maybe an hour or two all-in). To me, it goes to show that (just about) anything is negotiable.
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4 weeks more than you would otherwise receive. That’s a win. Nicely done!
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That is 50% more than you would have had. That is awesome.
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That is 50% more than you would have had. That is awesome.
^This.^ Good for you!
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4 more weeks of pay and bennies to sit on your kiester, maybe vacay a littlie ,and leisurely look for whats next?
Monster win.