How to negotiate your severance package
Austin Musk 1 May 2022

How to negotiate your severance package

The world revolves around the motto of 'pay and work.' All big multinational companies or small businesses work on this. They hire people, pay them, and get the required work. This payment is a reward for a worker, which depicts his hard work and perseverance. Money a person, earns manifests his struggle and endeavor. 

The company pays a person throughout his working period. However, that person also receives some cash to bid farewell when he retires. That gesture of gratitude by the company could be either money, land, or any reward. This monetary benefit that a person gets is his legal right not only granted by the company but by the government also. Hence, he must get what he deserves. If he has to opt for the path of negotiations, then he mustn't be reluctant to do so. 

What is a severance package? 

A severance package is an individual's payment when he leaves the company or gets retirement. This financial benefit would help him live the rest of his life with ease. This accord that a person makes with his company is negotiable. A person must know that this package would provide him with a financial cushion and relieve his stress. Hence, he must know his legal rights and should never hesitate to procure them. 

A severance package includes a whole sum of payment that a person gets when he leaves employment. The company gives him a pension plan and stock options. The company also gives him employment opportunities by helping him get a new job to earn his bread and butter. 

What is included in the severance package? 

A severance package is a complete package that guarantees individual financial security for the rest of his life. The package includes the following reliefs for the retiring or leaving employees: 

  • A whole lump sum of money is given to an employee when he leaves the job

  • A person gets monthly income in the form of a pension. 

  • Employee unused sick days or holiday pay is also given at the end.

  • He also receives insurance and medical facilities. 

  • A stock option is given to him.

  • The company also carries the responsibility to seek a job for its leaving employees.

Negotiating your severance package

Only a few of the employees know that the severance package is negotiable. A person could do this negotiation with the company if he knows the valid route to carry out this discussion well. Following are some guidelines that will illustrate how a severance package should be negotiated authentically and legally: 

A deep understanding of the severance package

A person should know what is included in his severance package. If he has inadequate information, he cannot forward his proposal and preferences. Initially, he must know the approximate pension after retirement, his share of stock, his unused holidays, etc. He must gather all his facts and figures and prepare a rough report on them. 

A planning

A person should prepare in advance for well-led negotiations on a severance package. He must prepare a list of his future financial needs. Evaluate the severance policy of the company. He may take assistance from the former employees of the company. Furthermore, he must prepare a list of points that he thinks are negotiable with the company.

Hiring a labor lawyer

Labour lawyers take cases related to disputes between the employees and employers. They could lead the negotiation by working as a mediator among the parties. If the employee cannot understand the language of the severance accord or if the agreement is several pages long, he could hire a labor lawyer. The lawyer could help in understanding that accord from a legal perspective. He would ensure the application of laws related to a severance package. In this way, the person would get the required money that he deserves. 

Seeking unemployment insurance.

This point must be negotiated well with the company as he is unemployed and needs another job. Hence, according to unemployment insurance, the company will bear its expenses for around 26 weeks. 


A severance package ensures financial security. As it is a legal right of the employee, he must get what he deserves. In the context of above mentioned guidelines, it is crystal clear that it is the right of the employee to negotiate on those points which are his right. Hence, he should strive to procure benefits to earn a good living.

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