Severance negotiations are a vital aspect of the whole employment scenario of Connecticut, and they often happen at a stressful and sensitive time for employees and employers. Working through such discussions successfully needs careful strategy and awareness to ensure a beneficial and fair outcome for the parties involved.
Most of the time, people in such cases are in great need of some competent severance negotiation lawyers, and Carey & Associates, P.C. are pretty prominent in the particular field.
In this blog, we are going to explore some common pitfalls that must be avoided during severance negotiations to help streamline the whole process and prevent any future complications.
Lack of Preparation
A significant mistake that employers and employees make is stepping into severance negotiations unprepared. It is pretty much necessary for employees to have a good understanding of their rights, their worth, and the typical components of a severance package.
A benchmark for negotiations can be attained by researching comparable severance agreements and prevailing industry standards. Employers must be prepared with structured, precise offers and have a good understanding of the legal implications of the proposals.
Preparation here includes having a clear idea of the negotiation objectives and boundaries, as well as having all relevant documents.
Ignoring Legal Counsel
Severance agreements are essentially legal contracts at the end of the day, and failing to consult with an attorney can result in unfavorable terms and overlooked obligations. Employees must get legal advice to make sure all the terms included are fair and lawful.
For employers, bringing legal counsel on board can help with drafting agreements that comply with the existing laws and protect the interests of the company at the same time. Legal counsel can identify any potential problems that could result in numerous disputes in the future.
Overlooking Tax Implications
Both parties involved must take into consideration the tax consequences of severance payments. The severance payment is indeed typically taxable, which means that the way in which it is paid out affects the tax burden.
Suppose the payment is of a considerably large amount. In that case, it can put the employee into a higher tax bracket, and paying it out structurally can be a more favorable tax situation overall.
Employers must provide clear explanations of the implications of tax, and employees must consult with a tax advisor to comprehend the best alternatives and options by taking the particular financial situation of the employee into account.
Failing to Negotiate Non-Monetary Terms
Severance agreements often include non-monetary terms too that can be as vital as the financial components of the negotiation. Employees usually tend to overlook the sheer importance of benefits such as outplacement services, continued health insurance coverage, or the retention of company devices.
In a pretty similar fashion, employers must make sure that numerous clauses such as NDAs, NDCs, and NCCs are crafted with utmost care and enforceable. Ignoring such crucial aspects can result in dissatisfaction and legal consequences probably down the line.
Emotional Decision-Making
Severance negotiations can be emotionally charged or acting on impulse, particularly for employees facing some unexpected or unprecedented job loss. Making decisions based on emotions and impulsive reactions rather than doing a thorough, rational analysis can result in unfavorable outcomes.
Both parties need to have a professional and calm approach towards negotiations. Employees must take enough time to process emotions and get support from some legal counsel or trusted advisors.
Employers must communicate with some empathy, but keep in mind that the focus is eventually on attaining a fair and legally sound agreement.
Let’s Conclude!
Severance negotiations are a pretty delicate process and need to be planned carefully, along with legal insights and clear communication. A severance negotiation lawyer can be of great significance in such scenarios in making sure everything goes as it is supposed to happen.
