Severance Packages

 Severance Packages in Indiana: How We Can Help Employers and Employees

Severance packages are a valuable tool in the employment world, offering benefits to both employers and employees during transitions. At AAKlaw.com, we focus on drafting and negotiating severance agreements that protect our clients’ interests, whether you are an employer looking to reduce liability or an employee seeking fair compensation.

What Is a Severance Package?

Severance packages typically provide financial and other benefits to employees in exchange for agreeing to certain terms, such as releasing claims against the employer. These agreements often include:

1. Severance Pay
   Indiana employers frequently calculate severance as 1 to 2 weeks of pay for every year of service, though amounts may vary depending on circumstances and negotiations.
2. COBRA Coverage
   Employers may choose to include COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits to extend health insurance coverage, either partially or fully paid. This can be a key element in negotiations, as continued health insurance is often vital for employees during job transitions.
3. Release of Claims
   Severance agreements typically include a release of claims, where the employee agrees not to pursue legal action against the employer. While this release is comprehensive, certain claims—such as workers’ compensation or the right to report legal violations—cannot be waived.

How We Help Employers

For employers, severance packages are a strategic way to mitigate risk and avoid potential lawsuits, including discrimination or wrongful termination claims. We can:

• Draft Customized Agreements: Tailored to meet your specific needs while complying with all legal requirements.
• Negotiate Terms: Ensure agreements are fair and minimize future liabilities.
• Include Protective Provisions: Add confidentiality, non-disparagement, or non-compete clauses where appropriate to safeguard your business.

Employers benefit from having experienced attorneys draft and review severance agreements to ensure clarity, enforceability, and legal compliance.

How We Help Employees

For employees, a severance package provides financial support during the critical period of searching for new employment. However, these agreements often contain provisions that can have long-term implications. We can:

• Review Severance Agreements: Identify terms that may be overly restrictive or unfair, such as new non-compete clauses that limit future opportunities.
• Negotiate Better Terms: Advocate for increased severance pay, extended COBRA coverage, or the removal of harmful provisions.
• Protect Your Rights: Ensure you do not unknowingly waive claims you are entitled to retain or agree to terms that could harm your career.

Common Pitfalls in Severance Agreements

Both employers and employees should be aware of potential issues in severance agreements:

• Non-Compete Clauses: Employers sometimes use severance agreements to impose new restrictions that didn’t exist in the original employment terms. These clauses can significantly impact employees’ ability to find new work.
• Tax Implications: Severance pay is taxable, and large payouts could have unexpected tax consequences for employees.
• Vague Language: Poorly drafted agreements can lead to disputes over enforceability or interpretation.

Why Work With AAKlaw.com?

Severance agreements require careful attention to detail to ensure they are legally sound and meet the needs of all parties. Whether you’re an employer protecting your business or an employee protecting your rights, we can help you:

• Understand your legal obligations and rights.
• Draft clear, enforceable agreements.
• Negotiate favorable terms.

At AAKlaw.com, we bring experience, strategy, and insight to the table to achieve the best possible outcomes for our clients. Contact us today to learn how we can help with your severance package.