The tech industry is among the industries that have withstood the coronavirus pandemic.
Nonetheless, tech workers have been laid off in some tech sectors, such as Airbnb and cab services. A severance package is a gesture of goodwill provided by an employer to manage how an employee responds to a layoff.
When you’ve been laid off, try and negotiate a good package by considering the following:
1) Know the Elements of a Severance Package
Most employees think that severance pay entails a severance package. However, there are various elements to a severance package. This is a bonus for a former employee as it gives you room to negotiate severance packages in St Louis.
If your employer is adamant about the amount to pay, there are other ways you can increase the value of the severance package.
The following are components of a severance package you can negotiate:
- Severance pay: This is the money given to a former employee after discharge from employment. Standard severance pay should be six months to one-year’ s worth of your previous salary.
- Benefits: If you were a full-time employee, you could continue to enjoy your medical insurance and health benefits sponsored by your former employer. If you were paying a monthly premium, you could negotiate for your former employer to pay the premium as you look for a new job.
- Paid time off: If you have unused time off, such as vacation and sick days, you can negotiate to receive payment for time accrued.
- A non-disclosure agreement (NDA): Some employers offer compensation to employees if they agree to sign a non-disclosure agreement. An NDA can state that an employee should not share information with a competitor or agree not to speak about their former boss negatively.
2) Don’t’ be in Haste to Sign the Paperwork.
Many employers want a smooth layoff process, so they want you to sign the paperwork right away. Despite wanting to get through the uncomfortable layoff meeting as fast as you can, it would be better to delay a bit in signing the agreement.
You may be experiencing strong emotions due to the layoff, which may cloud your decision making. Therefore, take some time and process the situation. Research the time allowed to consider the severance package before you accept the severance package.
3) Seek Expert Opinion
Look for a business mentor in the tech industry or a lawyer to help review your severance package, especially if this is your first layoff. An expert can help identify confusing information and advice on how you can negotiate a better severance package.
Involving a lawyer is also helpful if the severance package includes signing an NDA, as it can limit your employment opportunities in the future.
4) Preserve your Equity in the Tech Company
Know the type of equity you have in the company. This could be incentive stock options (ISOs), restricted stock units (RSUs) or non-qualified stock options (NQSOs). You can ask your employer to accelerate the vesting of unvested equity grants as the layoff was not your fault.
If your equity is ISOs, negotiate to have the employer extend the 90-day expiration window after employment termination. This will allow you to convert the equity to NQSOs and forgo some tax benefits. A tax or financial planning expert will help weigh your options to avoid extensive tax complications.