Get what's coming to you

MarketWatch (MCT) - It may not be much solace to the 4.4 million people who've been laid off since the recession began in December 2007, but a new survey shows most companies are at least remaining generous with their severance packages. Plus, laid-off workers often can negotiate a higher payout or other benefits, experts say.

Sixty-five percent of companies said their severance packages are unchanged, while 19 percent said they made them bigger, according to a survey of about 1,000 companies of different sizes and from a broad range of industries. Survey responses were collected throughout 2008.

"In spite of the financial conditions we're living in right now, the majority of companies either maintained the level of severance they were paying or actually increased it," said Rob Saam, senior vice president and career transition practice leader at Lee Hecht Harrison, which commissioned the survey. Lee Hecht Harrison is a work-force consulting and outplacement-services firm.

Severance packages often are one to two weeks of pay per year of service, though the total amount paid varies widely by company size and the employee's job. About 80 percent of firms surveyed said administrative and support staff are eligible for severance pay. Almost 90 percent said executives are eligible. Four percent of firms surveyed said administrative staff don't get severance, and 1 percent said executives don't get it.

Payouts at the executive level are likelier to be based on a combination of salary, title and years of service, while lower-level workers' severance often is based solely on years of service. And, at companies that said they have a maximum payout, senior executives are likelier to be eligible for a year or more of severance pay, while professionals and administrative staff are likelier to be limited to 26 weeks, according to the survey. At companies with 500 or fewer employees, the maximum is likelier to be 13 weeks.

Laid-off workers might appear to be without much bargaining power, but they have leverage in negotiating a higher payout or other benefits. That's because most firms _ 93 percent in the survey _ ask workers to sign a release stating they won't file suit against the employer.

"They don't want to worry that this employee will come back and sue them. That's the leverage," said Pamela Sayad, an employment lawyer in San Francisco.

While there's no guarantee your employer will agree to your request, don't think it's out of line to ask. "It's a very common thing to negotiate," said Barbara Barra, executive vice president of field sales and operations with Lee Hecht Harrison. "The trade-off is (the employer) is going to ask you to sign a piece of paper that essentially says you release us from any claims."

In the survey, 69 percent of companies surveyed said avoiding future litigation is a "key driver" of their severance policy, while 43 percent said standing out as an employer of choice and 25 percent said viewing employees as potential customers. Just 7 percent said treating laid-off workers "fairly/respectfully" was a key driver, according to the survey. Respondents could select more than one answer.

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Don't worry that negotiating puts your severance pay at risk _ it's unlikely that what's been offered will be retracted, Barra said. "I've never heard of a company taking off the table what has been put there," she said. Still, "be aware that you might not get everything you ask for."

Another area open for negotiation: Consider asking for an extension of health benefits beyond the severance term. If the employer doesn't agree, then ask for help paying for Cobra benefits. Under Cobra, laid-off workers get access to their employer's group health plan but must pay about 100 percent of the premium, though the recently passed federal stimulus bill provides temporary aid for Cobra benefits, paying 65 percent of premiums for some unemployed workers.

You can also ask the company to pay for outplacement services, which help job seekers prepare resumes, brush up on skills and gain access to job postings.

Barra said workers can get creative in asking for other benefits, too, such as paying the cost of membership in a professional organization to aid in networking.

Also, talk with your employer about how it will present your layoff in the exit statement. One example: "We had a sizable downsizing and unfortunately that job was one of those that was eliminated."

That's not the same as a reference, which few employers give these days. For a reference, Barra said, go to people with whom you worked closely and ask "not on behalf of the company, but a personal reference," she said. "People are pretty successful at doing that, as long as they don't burn those bridges."

Some workers might want to negotiate an exit statement that says the worker resigned rather than was laid off. However, be careful: The new federal subsidy for Cobra is only paid to workers laid off involuntarily. An exit statement to the contrary may put that benefit at risk, Sayad said. One possible option is to ask the employer to note that, "for purposes of future employment, this will be a resignation, but for purposes of Cobra coverage it is a termination," Sayad said.

Before you sign the release, consider talking to an attorney. Under employment antidiscrimination laws, employers must give workers over age 40 a minimum amount of time _ anywhere from 21 to 45 days, Sayad said _ to mull over the offer. They're not required to give younger workers that amount of time, but many employers do, particularly larger firms.

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"You are waiving any and all claims you have against your employer so you need to be careful," Sayad said.

To better your odds of getting either more pay or other benefits, consider these four tips:

Cool off. Avoid negotiating on the same day you've been laid off. "Never try to negotiate it on the spot. You always need the clear thinking," Barra said, "and to come back with a strategy."

Back up your request. Employers may be more amenable to your request if you offer compelling reasons, Barra said. For instance, if you've been with the company for many years and are older, explain that you haven't job-hunted in years. Say: "I don't think the three months' severance you've offered is going to bridge me until my next job. Five months seems more realistic. Would you consider giving me more?"

Ask for a mutual release. Some workers should consider asking for a mutual release. "Not only are you releasing the employer from these claims," Sayad said, "but we want the employer to release the employee from any potential claims as well, so the employee doesn't have to worry about the employer coming back in the future and suing him or her for something related to their employment," she said. "It doesn't happen often but in this economy, particularly in some of these industries, like financial services, you never know. We are very careful in advising those clients who are in those industries to get mutual releases," she said.

Ask for a copy of your personnel file. "We always advise our clients to get a copy of their entire personnel file," Sayad said, to ensure the documentation is correct. If you've already been laid off, it's not too late to ask, she said. Even once you've left employment, she said, you're still "entitled to copies of all the documents you signed that are in your personnel file."

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See Sayad's Web site for tips for laid-off workers. http://www.sayad-biren.com/employment.htm

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