Ask Terry Questions Severance pay vs staying with company

Severance pay vs staying with company

By Terry Savage on April 11, 2017 | Wild Card

As part of a recent mass layoff, I have 60 days until my employment ends and my last pay check. I haven't received my figures yet, but I'm estimating lump sum severance to be $50K after taxes.It would be deposited to my bank account a few weeks after the term date. We are allowed to apply for a different position within the company and if hired, would make the severance null and void of course. Staying on with the company would be preferable, but the $50K is appealing because I'm going through a divorce and will only have 1 income go forward. Optimally I'd obtain employment elsewhere to start after my term date, but fear what happens if I don't. I will have to start over somewhere else, less paid days off, and if I don't get something else I'd have to go on Cobra. I'd like to get the severance to help support myself but would also feel more secure gaining other employment within the same organization before the end date comes. What would you recommend to be the best option? Thanks, Sal

Terry Says

OK, this is tricky.  My first suggestion is to talk to the HR department.  You can't be the only one in this position.  What do they say about returning the severance in case you are re-hired?  And what happens to any taxes that are deducted from the payout??   That could be a big issue.  Surely, they must have a plan. I agree that staying on with the company is preferable, if you don't lose your vacation and insurance status by making the transfer.  Ask HR about this part, too.  You need someone more familiar with the terms of the layoff to respond specifically.  And it can't hurt to let HR know that you really want to stay with the company!



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