Negotiation can be a stressful process.

In fact, one of the harder types of negotiation can happen when an employee unwillingly leaves the company. Companies have the rights to terminate an employee for reasons such as: poor performance, organization changes, lack of funds, etc. One of the things that are not frequently discussed is the rights these exiting employees have.

When companies terminate its employees, these exiting employees can be presented with a Severance Agreement. A Severance Agreement is not required by law. However, it helps the company to prevent future lawsuits, prevent the exiting employees from bad-mouthing the company, and keeps the relationship in good standing despite their separation.

Severance Agreement is the contract that an company may ask an exiting employee to sign. In this Agreement, it will lay out the details of their Severance Package.

Severance Package is the term for the benefits that the company is willing to provide for its exiting employees. The benefits can vary from employee to employee as it depends on various factors such as: present position within the company, tenure with the company, etc. However, regardless of position and tenure, there is always room for Severance Negotiation.

Prior to the negotiating call with HR, it is best to make a list of what you, the exiting employee, think you will need in the next 3 to 6 months. Or if you have already received your Severance Agreements, here are some of the ideas and questions to clarify prior to signing your Severance Agreement:

1. Separation Compensation: Depending on your position and tenure with the company, this amount can vary greatly. However, there is always room to ask for more. If you believe you need an extra month or two before you can find your next job, state it clearly as you will not have the opportunity to go back and request for more compensation after you sign the Severance Agreement.
   • Is the payment in lump sum? Or is it paid out over a period of time?
   • When will you receive the money?
2. Placement services: This is placement support service that helps exiting employees find their next opportunity. People who work at these Placement Agencies are trained to help exiting employees improve their interview skills, such as writing resume, cover letters, interviewing, networking, search for jobs, job and career coaching, etc.
   • Is the company partnered with an outplacement agency?
   • If so, are you eligible to participant?
   • What are the terms and condition here?
   • How long will you have access to this outplacement agency?
3. Health Insurance: Healthcare, unfortunately, is very expensive in America. If you and your spouse is covered by your current company’s health insurance plan, it can be expensive to switch over to private insurance. One of the things that you can do is ask the company to extend your coverage. Another option is have the company compensate you for the cost of COBRA for a couple extra months.
   • If you or your family have any critical medical condition or expecting any expensive medical procedures, it is best to highlight how this extension can be beneficial to you – both mentally and physically as you adapt to the new changes.
4. Vacation/Sick Days: Review the amount of accrued vacation and sick time – including rollover from the previous years – and make sure this is included in the Severance Agreement.
   • If the company offers unlimited vacation days, try to find the average number of days companies of similar size offers to their their employees and request for pro-rated amount of days.
     • Take, for instance, a company within the same industry and similar size offers 3 weeks of vacation. If the employee was laid off in June, half of 3 weeks would be 7.5 days. Try rounding the week up and ask for 2 weeks of vacation. Remember to aim high!
5. Early release of bonus/stocks/RSUs:
   • If you have any company vested or unvested RSUs, ESPPs, how are those handled?
   • If the layoff is not the employee’s fault and the employee has plans on staying with the company, the employee has the rights to request for their bonus, stocks, and RSUs to be released to their name at an earlier time.
6. Delay termination date for X number of months:
   • If the exiting employee has a Work Visa (such as H1B), this is an important question to ask. Work Visa Holders need to find another employer-who is willing to provide sponsorship-within 60 days of termination in order to stay in the United States.
   • Studies have shown that people who are employed have a higher chance of landing another job faster and get a better total compensation. One thing that you can do is to ask HR to delay your termination by X number of months.
   • Regardless of the reasoning for delaying the termination date, you will want to double check with HR on when is the earliest you can apply for unemployment. If termination date is delayed for a couple months, you may not be able to file for unemployment until the termination date has been reached.

These are all suggestions that are worth asking to make the next couple of months easier. The company may not agree to all of your requests, however, if they can increase their severance package in any way, it is considered a successful negotiation. I have heard of multi-million dollar severance before; however, it was for a very senior position and attorneys were involve in the negotiation process.

My point here is that it will not hurt the exiting employee to ask for more compensation and flexibilities. Preparation is the key for success here.

Good luck with your job search!