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How to Assemble Severance Agreement

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- This video is all about severance. In this video, Im gonna explain how to increase your leverage so that you can negotiate for more money. At the end of the video, Ill give you six bargaining chips that are absolute gold. (upbeat music) First, lets cover some basics. What in the heck is a severance agreement? Its very simple. Its a contract, a contract in which you are giving up your right to sue the company in exchange for money. Thats it. The whole point of severance agreements from the employers perspective is to buy peace of mind, buy certainty. When they slide that check across the table and you sign that severance agreement, you cannot sue them, for the most part, unless its a terribly written severance agreement, which is extremely rare. These are very standardized and very formulaic and very enforceable, for the most part. So once you sign that severance deal, youre pretty much out of luck for ever pursuing legal action against that company for what happened in the

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How do you explain severance packages?

A severance package is a bundle of pay and benefits offered to an employee upon being laid off from a company. The receipt of a severance package is contingent upon signing a severance agreement.

What means severance pay?

Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination. There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay.

How do you put together a severance package?

A severance agreement should include the following elements: The name of the employer and employee. The effective date of the agreement. The employment period of the outgoing employee. The severance pay amount. Terms of continuation of benefits. Employee waiver of legal claims.

What are examples of severance agreements?

For example, a severance contract could include a severance pay term granting one weeks pay for each year of service to the employer. Although not required, some employers may also offer other severance benefits, such as job counseling or payment of COBRA expenses, as part of an overall severance package.

How do I draft a severance agreement?

What should be included in a severance agreement? Compensation details. Confidentiality rules following termination. Date of employees termination. Agreement from both parties in the form of a signature. Details about how long the employee will continue to have access to benefits.

What is an example of a severance agreement?

Severance Package Example: THEREFORE, both parties voluntarily agree to the following terms: Effective as of the Severance Date, the Employees position with the Employer shall be terminated. The Employer is under no obligation to pay any sum as a result of the termination.

What is a severance arrangement?

An agreement to record the terms of an employees departure, and the payments to be made to the employee, in return for a waiver of claims against the employer.

Does severance mean fired?

The payment is made when the employer terminates or severs your employment. A severance payment is meant to compensate you for immediate losses suffered from losing your job. The pay is typically reserved for employees that have worked at a business for a long period of time.

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