When employment ends, workers may be offered either severance pay or separation pay. While often used interchangeably, these two forms of compensation are different in purpose and structure. Understanding the distinction is essential to ensure you receive everything you are owed. If you have questions, contact The Law Offices of Usmaan Sleemi. Our experienced New Jersey employment lawyer can review your rights and help you take action if you’re being treated unfairly.
What is Severance Pay?
Severance pay is a financial package employers may offer to ease a worker’s transition after termination. Often negotiated, severance packages are designed to:
- Provide a financial cushion;
- Protect the employer’s reputation;
- Encourage the employee to sign agreements, such as non-disclosure or waiver of legal claims.
Because severance often involves the surrender of important rights, it’s critical to negotiate thoughtfully. An employment attorney can help ensure you receive fair compensation before you sign anything.
What is Separation Pay?
Separation pay is broader and may include severance, but typically also covers:
- Payment for unused vacation or personal days;
- Unpaid wages or overtime;
- Other contractual benefits.
Unlike severance, some components of separation pay might be legally required under your employment contract or company policy. Reviewing your contract or employee handbook is key to verifying what you’re entitled to.
Were You Paid What You Deserved?
It’s not always clear if you’ve received full separation pay. Some employers withhold amounts to save costs. A skilled employment lawyer can review your employment agreement, benefits policies, and final paycheck to ensure you’re properly compensated.
The Importance of Negotiating Severance
If you are offered severance in exchange for waiving legal rights, careful negotiation is essential. A lawyer can evaluate whether the offer aligns with industry standards and advise you on whether to accept or pursue better terms.
Speak with a New Jersey Employment Lawyer
Attorney Usmaan Sleemi has successfully negotiated severance packages for employees throughout New Jersey. If you’ve been terminated or laid off, call our office to schedule a confidential consultation and protect your rights.
