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What Should a Severance Agreement Include?
According to recent media reports, approximately 20 percent of executives in the finance, insurance, real estate, software, and tech industries are anticipating layoffs and workforce reduction within the next few months. Although not a requirement under Florida law, it is likely that many of these layoffs will involve severance packages. In order to take advantage of a severance package, most employers will require employees to sign a severance agreement.
What Are Severance Agreements?
A severance agreement can be beneficial to both an employer and an employee. They provide protection for the employer in preventing the employee from filing a lawsuit against them in the future. They provide protection for the employee because they stipulate exactly the amount and type of payment and benefits they will receive. There can also be other stipulations added, such as not disclosing the reason for termination to any future prospective employers.
There are other stipulations that employees should be aware of before signing any agreement.
Severance Pay
Payment for the termination is usually offered in some term of weeks (for example, five weeks of pay). It is common for the offer to be based on the length of employment, such as one week of pay for each year of employment.
Vacation Pay
Employees are entitled to payment for earned, but unused vacation time.
Non-Compete Agreement
If the employer and employee entered into a non-compete agreement, the employer should provide a copy of it to the employee and remind him or her of the terms and conditions. Additionally, changes to the non-compete can be made during severance negotiations and placed in the agreement. However, these factors depend on the final FTC ruling regarding these agreements.
Returning Equipment
A discussion of what happens to any property of the employer (such as a company phone, laptop, or keycards) that is in the possession of the employee should be included in the agreement. This provision should explain how and by what date the property must be returned.
Claims Waived
This is often the most important provision for employers. Under this provision, the employee relinquishes any right to file a lawsuit against the employer. It should define all of the types of claims and lawsuits that are barred.
Employees Over 40 Years Old
If an employee is 40 years of age or older, they are protected by the Older Workers Benefit Protection Act (OWBPA). Under this law, they must be given 21 days to review the severance agreement prior to signing it. Further, they have seven days after signing the agreement to change their mind and revoke it.
Contact a Fort Lauderdale Employment Attorney
If you are being asked to sign a severance agreement, do not sign anything until you speak with a Broward County severance agreement attorney. Our firm can make sure that the provisions in the agreement are to your benefit. Call The Elliot Legal Group, P.A. at 754-332-2101 to schedule a confidential consultation.
Source:
https://www.jacksonville.com/story/business/employment/2022/12/08/layoffs-expected-hit-floridians-across-job-industries-2023/10840758002/
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0215/Sections/0215.425.html
