How Much Severance Pay Can You Expect?
Many laid-off employees are being offered more generous benefits than in the past. Plus, how to win back a boss who fired you, and how long is too long to consider a job offer.
By Anne Fisher, FORTUNE senior writer

Dear Annie:
I just found out that my job, along with those of several other people in my department, is being eliminated soon. This is really discouraging, since it will be my second layoff in four years. (I lost my last job at the end of 2001.) Also, I just turned 50 and I think job hunting will be tough this time around. Do you have any sense of how much severance pay would be reasonable to expect? So far, the HR people have told us nothing specific, but is it usually still based on years of service, or what?
-- Castaway

Dear Castaway:
Yes, companies' standard severance policies are still based largely on years of service, with about half of employers offering two weeks' salary for each year you've worked there. Slightly more than one in three pay one week's salary per year of service; and fewer than 20% offer less than a year's pay per year of service. Outplacement giant Lee Hecht Harrison (http://www.lhh.com) recently polled human-resources folks at 1,030 U.S. companies and found that, overall, severance pay has held fairly steady since 2001 -- coincidentally, the last time the firm did this survey and the last year you had to worry about this. "Despite the recession in the intervening four years, most organizations didn't cut these benefits significantly," says Bernadette Kenny, a Lee Hecht Harrison executive vice president. "Regardless of economic circumstances, employers seem to recognize the importance of having severance benefits that are competitive -- not only to provide sufficient resources for those in transition, but also to preserve their good standing with remaining and potential employees."

So, for example, the survey found that only 33% of companies made any changes at all in their severance policies during the economic slowdown -- and, of those, 52% actually became more generous. One interesting change: 49% now offer severance benefits to part-time employees, up from 39% who did so in 2001. A tiny 2% of companies say that temporary or contract workers are eligible to get severance, but that's still double the 1% of companies that said so in 2001.

But now let's talk about your situation specifically. Your age is significant here, because federal law provides particular protections for employees over 40 who lose their jobs. For one thing, you're legally entitled to take 21 days to think over a severance offer before you sign a severance agreement -- and even after you sign, the law gives you seven days to change your mind. So don't be rushed into anything. There are usually several components to a severance package besides cash, and some of them may be more negotiable than you think. For a few ideas you may find helpful, take a look at a column that appeared in this space in May, "How to Get a Better Severance Package". Best of luck.

Dear Annie:
The company where I work was just acquired, and I've discovered that the company that bought us is headed by a boss who previously fired me. I made some mistakes back then, but I've made some changes and been very successful ever since. I don't even know yet if I'll have a position with the new company, but I wonder how I should proceed. Should I approach her? If so, what should I say?
-- Older & Wiser

Dear O & W:
By all means, make an appointment to stop by her office for a quick hello. If you don't, and she finds out you're working for her again (as of course she will, sooner or later), it will look as if you're hiding out and hoping she won't notice you. Talk about awkward! Go in there with a confident, friendly air about you, and briefly tell her what you just told me, i.e., you're well aware there were serious problems between the two of you in the past, but you've changed your ways, and you hope she will give you the opportunity to prove it. If you get along well with your current boss, it wouldn't hurt to ask him or her to put in a good word for you, too. Of course, as with any merger, there may not be a place for you in the new organization -- but it would be nice to know that it isn't because your old nemesis is still holding a grudge.

Dear Annie:
I'm an MBA who was laid off last June when my former employer closed down. I went through a three-month series of interviews at a company more than 2,000 miles away. Then the company deliberated for three weeks, during which I heard nothing from them. Finally, someone called and made me a job offer. I was pleased, but -- partly because of the long-distance move my family and I would have to make -- I asked for one day to think it over. Five hours later, they called me back and rescinded the offer, because I was "taking too long to decide." Is this normal? When companies make job offers, do they expect an answer immediately, or was I just dealing with a jerky company?
-- Stone Mountain Sam

Dear Sam:
I've heard some strange stories lately -- including one from a guy who was fired because he wouldn't stay out carousing with his boss until 3 a.m. while the two of them were on a business trip (has anyone else on earth ever been fired for not drinking enough?) -- but this one takes the cake. Any company that would put you through a three-month interview ordeal, leave you dangling for three weeks, and then refuse to give you a measly 24 hours to decide is most definitely a jerky company. If this is how they treat job candidates, just imagine how delightful these people would be to work for. Good riddance to 'em.

-------------------------------------------------------

Next, see FORTUNE's 100 Best Companies to Work For.

Find the best employers in your state.

Got a question or comment? E-mail me hereTop of page

YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.