How to Negotiate Your Severance Package: What You Need to Know
Severance Packages Are Almost Always Negotiable
Most employers present severance as a final offer, but there is usually room to negotiate — especially if you have tenure, specialized knowledge, or potential legal claims. You typically have 21 days (or 45 days in group layoffs under the OWBPA) to review the agreement.
What a Typical Severance Package Includes
- Lump sum or continued salary for a set period
- COBRA health insurance continuation or subsidy
- Payment for accrued but unused PTO
- Outplacement services
- Reference letter or neutral reference agreement
- Release of claims against the employer
What to Negotiate
Financial Terms
- More weeks of severance pay (standard is 1-2 weeks per year of service, but this varies)
- Bonus payout for the current year, prorated
- Extended COBRA coverage or employer-paid premiums
- Accelerated vesting of stock options or RSUs
- Extended exercise window for stock options (90 days is standard, but 6-12 months is possible)
Restrictions
- Narrower non-compete scope, duration, or geographic limits
- Removal of non-solicitation restrictions
- Garden leave provision (employer pays you during the non-compete period)
- Mutual non-disparagement rather than one-sided
Practical Protections
- Neutral reference agreement specifying what the company will say
- Extended access to company email or files for a transition period
- Outplacement services or a career coaching stipend
- Ability to keep company equipment (laptop, phone)
- Delayed start date for the non-compete clock
Common Mistakes
- Signing immediately under pressure — you almost always have time to review
- Not reading the release of claims carefully
- Overlooking the non-compete or non-solicitation provisions
- Failing to negotiate the reference language
- Not calculating the tax implications of a lump sum vs. salary continuation
When to Consult a Lawyer
Consider consulting an employment attorney before signing any severance agreement. This is especially important if you have potential claims (discrimination, retaliation, unpaid wages), if the severance includes a broad release of claims, or if the non-compete restrictions are significant. Many employment attorneys offer a fixed fee for severance review.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.