Severance pay can seem like the silver lining of an untimely termination from your job. However, there are special considerations to be made before you sign your severance package. When you do, you usually forfeit certain rights and it could affect future job opportunities.
If you’re over 40, the good news is that you have a longer window of time to consider whether or not you will accept your former employer’s offer. Let’s take a look at the pros and cons of accepting severance pay and how severance pay typically works for folks over 40.
What is severance pay?
Severance pay might be offered to employees when they are terminated from their job. Such agreements are not required by federal law, but employers will sometimes offer them as a sign of goodwill toward their departing employees.
Offering severance pay could also make a job more attractive to new hires. Severance pay offers the employee a financial cushion while they seek new employment. Severance pay might include more than just wages. It might also include a continuation of the insurance benefits and other perks that the employee was entitled to while working.
What are the cons of accepting a severance package?
In some instances, there might be disadvantages to accepting severance pay. One is confidentiality. When you accept severance pay, you will usually give up your right to sue your employer for wrongful termination or to divulge any information that the company may not want to be publicly known.
Another consequence of accepting severance pay is that you might be asked to sign a non-compete agreement, which means that you will (for a limited amount of time) be precluded from working for one of your former company’s competitors. If you were offered an attractive position at another company, you would not be able to accept that employment until the agreed-upon non-compete window expires.
The severance package may provide temporary financial relief, but it’s important to weigh that against other future, possibly better-paying or more attractive job opportunities in your chosen field.
What should I know if I am over 40 and being offered a severance package?
According to the Older Workers Benefits Protection Act (OWBPA), if you’re over 40, you have three weeks from the date of termination to decide whether you will accept the severance package offered by your former employer.
Furthermore, if you are terminated as part of a larger group termination by your employer, you have even more time – 45 days, specifically – to review the severance package and make a decision as to whether or not you will accept it. You also aren’t immediately locked in once you sign. You have a period of one week to withdraw from the agreement if you change your mind and decide that refusing the agreement is in your best interest.
Contact a Washington D.C. Employment Lawyer
If you’ve been offered a sewerage package and want to discuss your options with an attorney, be sure to reach out to the employment attorneys of The Vaughn Law Firm. Remember: even if you’re over 40, 21-45 days still isn’t a large window of time to make your decision. Make to seek sound advice from a knowledgeable member of our team as soon as possible.
Call us at (877) 615-9495 or reach out to us online to schedule a confidential consultation today.