Your Employer Breached Your Employment Contract or Severance Package?

Can an Employer Change a Severance Package?

Unless your employer had you sign an employment contract that specified what you would receive in a severance package, they can change what is included in the package at any point. Furthermore, unless your state requires employers to offer a certain type of severance, an employer can choose to modify or end their severance plan at any point. It’s important for employees to understand their employment contracts and whether or not they include severance pay, as many employers can take advantage of complicated contracts. The severance package attorneys at Zeff Law Firm can help workers understand their employment contracts and what kind of severance benefits they may be owed.

Is it Better to Take a Lump Sum Severance?

Whether a lump sum severance is a better option depends on the individual preferences, as well as what the company is able to afford. With a lump sum payment, all of the money owed to an employee in the severance package is given to them in a large one-time payment. This type of payment usually allows the worker to qualify for unemployment benefits sooner but can be more difficult for smaller businesses to pay all at once. It is also important to remember that severance pay is still income, and thus is taxable. A lump sum payment may have more money withheld for taxes.

If your employer does not offer lump sum severance, they will likely pay out in regular installments. With this type of package, the employee is given scheduled payments over a set course of time (similar to receiving a normal paycheck). These can be easier for a company to afford, however depending on the amount, these continued payments can disqualify the person from receiving unemployment benefits, which may hurt them in the long run. Speak to one of our experienced severance package attorneys at Zeff Law Firm to better understand what your best option might be when considering severance payout.