One of the most difficult situations you will face in your life can also be one of the most important. Getting notified that you are being fired, terminated, cut, or laid off can be a gut-wrenching experience. More than likely you will be given a severance package. This package should include a variety of things including a check. However, it is not required that a company provide a severance package. One of the main reasons a company would not provide severance is if you were fired for misconduct.
So once you’ve been offered a severance package, what should you do?
First things first, don’t panic. While you have just been dealt a crushing blow to your ego and financial security, know that millions of people like you have dealt with the same situation and are still doing just fine today. It is important to keep a cool head because you have some logical thinking to do and some next steps that will require your immediate attention.
Last Payment vs. Severance
One of the first things you need to do with the severance is dive into it and read all of the details. Severance packages are usually monetary in nature. Your goal, if not explained to you, is to determine where they are getting the values from.
For example, severance pay is different from your last payment. Odds are you won’t be laid off exactly on the dot of when the next pay cycle begins, so you’ll have another paycheck coming. This should be outlined in the package. It is important to go back and calculate this yourself to make sure you are getting what you are owed. This includes any commissions, bonuses, unreimbursed business expenses, and overtime pay. If you feel you are being shorted, you should speak to your superior or look into hiring a wage attorney.
Review the Non-Monetary Details
Severance packages also include a handful of details that don’t directly involve money. One of those items is typically health insurance. Most employers offer continued coverage through a federal law known as COBRA. If you opt into this, your employer will continue to pay their portion of the premium for a specified period of time.
Another common non-monetary item in a severance package is a non-compete. Generally this serves as a reminder to what you probably signed when you first started at the company. There are three main items in a non-compete including scope, geography, and duration. Basically, your company is telling you that you cannot work for a direct competitor, in the same area, within six months (or some specified timeframe). Since you are being let go, the employer is likely to be a little more relaxed about this as opposed to if you had chosen to resign.
Finally, a general release is usually included in a severance package and is just a document or statement relinquishing your rights to sue the company. If you feel you’ve been wrongfully terminated or have not been paid all of your wages, it is your best interest not to sign this document. Your severance pay might not be afforded to you, but you’d have a much harder time legally battling your employer if you do sign it.
Immediately Apply for Unemployment
A good number of people out there feel guilty taking unemployment pay. It feels too much like a free handout that they didn’t earn. You are the good ones in which the system was built for. If you are laid off, you should immediately file for unemployment despite your personal pride. The amount of money is only a fraction of what you normally would be making but it can truly help you get through the coming weeks of unemployment. The government created this entity for a reason and it was to help people who have been laid off survive in the weeks that they search for a new job.
Your next step is to network. You don’t need to advertise to the world that you were just terminated from your position, but rather phrase it as you are pursuing new opportunities. It gets said quite frequently that is isn’t what you know, but who you know that matters. In this situation you might not know who you know until you make them aware that you are seeking employment opportunities.