How to Negotiate a Severance Package

Secure the Best Deal When You Need It Most

Losing your job hits hard. Whether you saw it coming or it hit you like a freight train, the emotional, financial, and mental weight of a layoff can feel overwhelming. The uncertainty sets in fast. You might wonder how you’ll cover your rent or mortgage, how long your savings will last, or how to explain the gap in your resume. But before you panic, take a deep breath. You may have more power than you think.

At Horn Wright, LLP, we know how difficult this moment can be. You’re not just losing a job. You’re facing an abrupt shift in your entire life. That’s why our experienced employment attorneys step in to help people throughout New York protect their finances and their future. We’ve successfully negotiated severance packages that go far beyond initial offers. With us, you’ll have a skilled legal team focused on making sure you get what you deserve, so you can move forward with confidence and peace of mind.

First Steps After a Job Loss: Slow Down, Breathe, and Gather Info

The moment you hear the words “we’re letting you go,” your heart drops. That emotional punch is real, and it’s okay to feel it. Many people experience shock, disbelief, and even anger. But here’s the key—don’t act on impulse. Signing something too quickly can cost you thousands of dollars or even your legal rights. Taking time to gather yourself isn't just self-care—it's strategic.

Here’s what to do first:

• Give yourself space. Take a walk, talk to someone you trust, or just step away from the situation to collect your thoughts. Your initial reaction isn’t always your best guide.
• Pull together your documents. You’ll need:
  • Your employment contract, if you have one, as well as all HR paperwork such as your offer letter and employee handbook.
  • Any written layoff notices or emails from HR
  • Details of the severance offer, including dates and amounts
  • The deadline by which they want you to sign

Seriously—do not sign anything right away. No matter how friendly HR seems, that severance agreement is designed to protect the company’s interests, not yours. Take time to think, read, and reach out for help if needed. You've got time to respond. Use it wisely.

Understanding Severance: What Exactly Are You Entitled To?

Let’s be clear: severance isn’t a guaranteed right for every employee. In New York, unless your employment contract spells it out or you’re part of a layoff covered by federal law, your employer doesn’t have to offer anything. This surprises a lot of people. But many employers still offer severance because it benefits them, too.

A severance package is essentially your employer’s way of saying, “We’re ending your job, but here’s something to help you land on your feet.” It’s financial support in exchange for your agreement, often including a promise not to sue them. Think of it as a negotiation point, not a gift.

Some situations do trigger legal requirements for severance:

• If your contract or union agreement includes severance terms
• If a large-scale layoff occurs under the WARN Act (which applies when 50+ workers are laid off at certain locations like offices in Midtown or Downtown Manhattan)

Here’s what’s often included in a severance package:

• A lump sum or continuation of your regular pay
• Extended health insurance coverage (sometimes through COBRA or a subsidized plan)
• Stock options or retirement benefits, depending on your role
• Outplacement services like job coaching or resume help
• Compensation for unused vacation or PTO
• Any company property, e.g., laptops, phones, or equipment, you may be allowed to keep

Don’t assume the first offer includes everything you're owed. Review each line, understand what’s offered, and consider what’s missing.

Why Companies Offer Severance (Even if They Don’t Have To)

If severance isn’t legally required, why do so many companies still offer it? It’s not just generosity. Severance is often a calculated move that serves the company’s best interest.

First and foremost, it protects the company. Severance agreements usually come with strings attached. Once you sign, you’re likely waiving your right to sue for wrongful termination, discrimination, or unpaid wages. This gives the company legal peace of mind.

But there’s more to it:

• Employers want to protect their reputation. No business wants a former employee airing grievances on social media or Glassdoor. A smoother exit means fewer public complaints.
• Severance can ease tension. Layoffs already hurt morale for the rest of the team, especially in close-knit offices like those around Bryant Park or the Financial District. Offering a package can soften the blow.
• It’s a competitive move. In industries like finance, tech, and law (where talent pools are tight), offering severance helps companies stay attractive to future hires and signals respect for employees.

So remember: you’re not begging. You’re bargaining. Your employer often has just as much reason to offer severance as you have to accept it.

Smart Tactics to Maximize Your Severance Package

You don’t need to be a lawyer to improve your severance deal, but having a strategy helps a lot. Treat it like a business negotiation. Because that’s exactly what it is.

Start by slowing the process down. You have the legal right to take time. Most employers give at least 21 days to review a severance agreement if it includes a release of age discrimination claims. Use that time to your advantage. Don’t feel pressured to respond within a day or two.

Bring in a legal pro. A lawyer who understands New York employment law can find hidden clauses, red flags, and spot areas for improvement. That alone can lead to a better deal. Even if it’s just a consultation, the insight can be game-changing.

Look at what's negotiable:

• Higher payout: Use your length of service, past performance, or the difficulty of replacing you as leverage.
• Extended health coverage: COBRA can be expensive. Ask if they’ll cover some or all of it.
• Tuition or certification assistance: If you're pivoting careers, that could be a smart addition.
• Career support: Outplacement services can shorten your job search—and should be on their dime.

Also, dig into the legal restrictions hidden in the fine print:

• Non-compete clauses could stop you from working in your field nearby.
• Confidentiality rules might limit what you can say about your work or the company.
• Non-disparagement clauses could restrict you from even mildly criticizing the company publicly, even on platforms like LinkedIn.
• Non-solicitation clauses could restrict you from contacting colleagues in the future to offer them employment opportunities

And finally, think about taxes. Can the payout be split into two years? Would installments reduce your tax burden? These are things you can ask to restructure. A tax professional can help here, too.

Making Your Counteroffer: How to Ask for More

Now comes the hard part: asking for more. But don’t overthink it. This is a negotiation, not a confrontation. You’re standing up for your worth.

Start with a short, clear counterproposal. Keep it professional and focused. Something like:

"After reviewing the severance agreement, I’d like to propose the following revisions..."

Then explain why you’re asking:

• You were with the company for several years and contributed meaningfully.
• Your sudden departure creates a financial hardship.
• You’re giving up significant rights by signing the agreement.

You don’t need to be emotional, but you do need to be persuasive. Facts matter. Cite specific accomplishments, company goals you helped reach, or recognition you’ve received. The more specific you are, the better your chances.

Pro tip: Keep all communication in writing. Email is your friend here. It keeps everything documented and gives both sides space to respond calmly. Don’t negotiate verbally without confirming everything in writing afterward.

Finalizing the Severance Agreement: What to Check Before You Sign

You're almost there. But don’t let relief cloud your judgment. Before you sign anything, double-check every line. This is your final opportunity to protect yourself.

Make sure the final agreement includes:

• The exact payout amount and when you’ll receive it
• Details about health insurance—how long it lasts and who’s paying
• Information on your retirement benefits, stock options, or bonuses, and the deadlines to exercise them, if applicable

Then look closely at the legal stuff:

• Are you waiving your right to file lawsuits now or in the future?
• What does the non-disparagement clause actually cover—does it go both ways?
• Are there limits on where you can work next or how you can use your skills?

If anything seems unclear, ask. Don’t assume the legal jargon means what you think it means. It’s better to delay signing by a day than to regret it for years. Consult an attorney if needed before giving your final signature.

Life After Signing: Making Your Severance Work for You

Once the agreement is signed and the checks start coming in, it’s time to shift your focus to the future. This is your chance to get strategic about what comes next.

Here’s what you should do:

• Get a clear picture of your finances. Know exactly how much money you have coming in and when. Set a calendar reminder for payment dates.
• Create a new budget. Account for health insurance, job-hunting costs, rent, and unexpected expenses. Leave room for breathing if you can.
• Apply for unemployment benefits. Yes, even with severance, you might still qualify in New York—especially if your severance is paid in a lump sum or doesn't affect your eligibility period.
• Reassess your career goals. Maybe this is the right moment to explore a new industry, learn a skill, or start something of your own. New York’s job market is huge—explore it with fresh eyes.

This transition can be scary, but it’s also a chance. With the right mindset and financial tools, you can take control of what comes next. Give yourself permission to plan for a better future, one step at a time.

How Horn Wright, LLP Can Strengthen Your Severance Negotiation

At Horn Wright, LLP, we understand the high stakes involved in severance negotiations. Our team of New York employment lawyers has helped countless clients push back against unfair offers and walk away with stronger, more secure agreements. We don’t just review the documents. We fight to improve them.

Contact our offices today to learn how we can help you advocate for your well-being, your finances, and your next chapter.