Separation and Severance FAQ
Our attorneys help you get answers
You’ve been told you are losing your job, and your employer has offered you a separation and severance agreement. You may still be processing the news of your job loss and now you have to think about whether or not to sign. You likely have a lot of questions. That’s why it’s important to talk to an experienced employment lawyer.
The attorneys at Gibson Law, LLC used to represent employers. We know the types of issues that are involved with separation and severance and what employers are willing to negotiate. Now, we help employees who have lost their jobs negotiate agreements that meet their needs and can help them transition to their next job.
Some of the common questions employees have include:
- Can separation and severance agreements be negotiated?
- Are these agreements legally binding?
- What is the difference between separation and severance?
- Is my employer required to offer me severance pay?
- Can I get severance pay if I was fired?
- What determines the amount of severance pay I get?
- How much time do I have to sign my separation agreement?
If you have been offered a separation or severance agreement, learn more about how we can help. Contact us our Cincinnati or Dayton office for a consultation with a member of our legal team. We can helps you find answers to any additional questions you have.
Can separation and severance agreements be negotiated?
It often depends on the situation, but in general, separation and severance agreements can be negotiated. An experienced attorney may be able to negotiate a higher amount of severance pay, a longer period of paid health insurance benefits, additional outplacement services or other forms of compensation.
Are these agreements legally binding?
Yes. A separation agreement is a contract between you and your employer. Once it is signed, both you and your employer are legally obligated to follow the terms. You will be waiving your right to take legal action against the company. That’s why it’s important to have an experienced attorney review the agreement before you sign it.
What is the difference between separation and severance?
The terms “separation agreement” and “severance agreement” are often used interchangeably. It’s a contract between an employer and an employee who is leaving the company. As part of the separation (or severance) agreement, the employee waives the right to take legal action against the company and also agrees to other provisions. In return, the employee receives a severance package, which can include severance pay, a continuation of medical benefits and other forms of compensation.
Is my employer required to offer me severance pay?
No. There is no requirement in the Fair Labor Standards Act (FLSA) or any other federal or Ohio law for employers to offer severance pay to employees who leave a company. But employers usually choose to offer severance pay to protect their interests and to provide their employees with some financial stability as they look for a new job.
Can I get severance pay if I was fired?
If you were fired for cause – such as poor performance, violating company policy or breaking the law – the company is under no obligation to offer you severance pay. However, in some situations they may offer a fired employee severance pay as part of a separation agreement designed to protect their interests.
What determines the amount of severance pay I get?
Severance pay is generally based on years of service. For example, your employer may offer one or two weeks of pay for each year you have been with the company. Other factors may include performance, the size of the company, your position and language in any existing company policy or employment contract.
How much time do I have to sign my separation agreement?
The Age Discrimination in Employment Act (ADEA) and the Older Workers Benefits Protection Act provides protection for older workers. Employees age 40 and older must be given at least 21 days to review a separation and severance agreement and 7 days to reconsider or revoke their signature. There is no specific time limit required by law for employees under the age of 40. But they must be given a reasonable amount of time to review the agreement.