In California, employers are not generally required by law to offer severance pay when an employee is laid off or terminated unless there is an agreement or policy in place that provides for it, such as a written policy or employment contract. However, that doesn’t mean severance packages are necessarily off the table—and that you don’t have the ability to negotiate the terms of your departure.
Employers sometimes offer them as a goodwill gesture or to avoid potential legal disputes related to potential legal issues that arose during the employee’s tenure. If you’re in a position where severance has been offered, or if you feel you deserve one and want to start the negotiation with your employer, knowing HOW to negotiate can make a significant difference.
What Should a California Severance Package Include?
While money is often the central point of severance, in certain instances, an employee may be able to negotiate other benefits, such as extended healthcare coverage (crucial for those who won’t have insurance that takes effect immediately), unused vacation pay, or even a neutral reference for future prospective employers. However, it’s important to remember if you’re being asked to sign a severance agreement, you’re likely waiving your right to sue your employer for any claims related to your employment—so it may be helpful to speak with an attorney before signing anything.
A strong severance agreement should outline clear terms, including the amount of severance pay, any benefits continuation, and the scope of legal claims you’re agreeing to release. Be sure to understand these provisions before signing. Don’t hesitate to ask questions.
If you’ve contributed to the company in substantial ways—perhaps by developing department or company-wide systems, managing processes, or serving as a key employee for a long time—these factors can strengthen your position in negotiations. Highlighting your value to the company can sometimes help justify a better package.
You’ve Been Offered Severance But Want to Negotiate
If you’ve been offered a severance package but feel there’s room to negotiate for more, there may be strategies to increase your chances of success. First, be mindful that making a counteroffer is technically a rejection of the original offer, which could result in the offer being rescinded or lessened. For that reason, it’s important to approach the conversation delicately.
Instead of outright rejecting the offer, frame your counter as an exploration of options. For instance, rather than saying, “This offer isn’t enough,” ask, “How would 10 weeks of severance pay look?” or “Would it be feasible for the company to extend my insurance an additional 90 days?”
Always keep in mind that severance is often given in exchange for a waiver of claims. This means your employer sometimes has an incentive to reward you for your time at your departure—which is leverage. This is where having a San Francisco employment law attorney can be helpful in preventing missteps and keeping the negotiation on track.
You Have Not Been Offered Severance But Want to Inquire
If you haven’t been offered severance but feel you may be entitled to one, starting the conversation requires a different approach. Since there is no legal requirement for employers to provide severance, the onus is on you to make a compelling case for why severance would be a fair resolution to your time with the organization.
For long-term employees or those with a history of significant contributions to the company, severance can serve as recognition of those efforts and provide a smoother transition out of the business. For those who are leaving under uncertain circumstances, severance often serves as a cap on the potential litigious matters at hand.
Negotiate a Proper Severance Package with Brandon Banks Law
At Brandon Banks Law, we understand that negotiating severance can be a delicate process. Whether you’ve been offered a package or want to inquire about one, we can help guide you through the process and protect your interests. Don’t leave these negotiations to chance. Contact Brandon Banks Law today to discuss your options and ensure that any agreement you sign serves your best interests.
