A severance agreement is sometimes offered to employees when a company is ready for them to depart. This type of agreement may contain a variety of terms that can affect how you move forward after you leave an employer.
Severance agreements typically depend on an employer’s policies, and the employment contract or a union agreement at issue. Understanding the responsibilities of both parties is critical if you’re presented with one.
What might be included in a severance agreement?
A severance agreement may include continued benefits, pay and other support, but they often feature significant restrictions as well. The terms of the payments and benefits should be clearly written and include information like when payments will be made and if taxes will be withheld. It’s a good idea to compare the pay terms with your current pay, and the benefits listed should be compared to what you’re already receiving.
These agreements may also include terms that could dictate your future actions to some degree. Many severance agreements include nondisparagement terms, confidentiality clauses and restrictions connected to future employment. While such concerns may seem simple, they can have a significant impact on you when you look for new employment.
In many cases, severance agreements have limits on how long you have to review terms. It might also include a revocation period. These deadlines are important to remember since they can affect your ability to accept or decline an offer.
Severance agreements can have a significant impact on your future. Reading this kind of document thoroughly to ensure you understand the terms is critical. Because these agreements can be complex, it’s beneficial to have a legal professional review the document to ensure you aren’t missing any important terms that could have a negative effect on your future.
