Here is the best way to decide if your organization’s layoff coverage is “good.”

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Layoffs this year have been largely limited to the hardest-hit sectors of the economy, particularly technology. But depending on your industry, you could face a layoff if the economy slows more drastically in 2023, and it’s not always clear what to expect from a soon-to-be ex-employer as they let you go.

Recent headlines have shown just how far-reaching corporate layoff policies can be, from the slash and burn that Elon Musk follows on Twitter to the efforts some executives are making in publicly announced layoff letters outlining the various benefits are extended to outgoing employees.

According to an annual survey by Just Capital, layoffs are a reputational concern for companies at a time when the American public ranks how companies treat their employees as the top ESG issue. Living wages, training and career opportunities, job security and diversity all factor into human capital metrics, but that doesn’t mean companies get a free pass on how they downsize. “Firings can be done in a fair manner,” said Martin Whittaker, founding CEO of Just Capital.

“My general philosophy of letting people go is you want to treat people well because everything comes down to your brand and in today’s market employer branding is very important,” said Paul Wolfe, former head of human resources at Indeed, who is now his own company runs consulting firms. “People who exit are still talking about your brand,” he said.

But there is a big problem: many employees do not know how to evaluate a separation agreement, they cannot distinguish a fair termination from an unfair one. Here are some recommendations from career experts for an employer-employee interaction that no one wants, but it’s better to prepare for it in advance.

Don’t sign anything the first time you’re notified

A very important finding for the beginning: You do not have to sign a separation offer. In fact, career coach Fiona Bryan’s number one piece of advice when making a resignation offer is not to sign a document immediately the first time you’re notified.

“It’s a really emotional time, and by law, your employer needs to tell you how long you have to sign the paperwork,” said Bryan, a professional careers coach at Ask A Career Expert and a senior managing partner at The Bryan Group. “Take the offer with you and read through it. Ideally, you would take this to an employment lawyer, and some offer short, free consultations.”

“That varies by company, but typically you have 21 days to sign a redundancy offer,” said Toni Frana, career services manager at FlexJobs, a membership-based job board for remote and hybrid roles.

“You can always negotiate the package,” said Andrew Challenger, senior vice president of outplacement firm Challenger, Gray & Christmas. And he says employees are more likely to thrive in this environment, which is a situation where many companies are over-hiring in a slowing economy, as opposed to a sudden, severe downturn like the Covid crash. “It’s not panic, it’s not a falling knife,” he said. Employees will never have as much leverage in a negotiation on the way out as they do in accepting a job offer, but “now is a better time than during a major crisis,” he said.

After you’ve had time to process the emotional, financial, and mental changes that a layoff brings, here’s how to determine whether or not your company’s layoff offer is a good one, and whether it’s time to move on to negotiate a better one.

It depends on how you take the severance pay

When it comes to severance payments, Bryan advises that people state whether they’re being paid in a lump sum or whether the company is keeping them on the payroll when they deposit the money into their accounts.

“When it’s a lump sum, sometimes it’s nice to get your severance pay and find a new job,” Bryan said. “But sometimes it’s useful for people to stay on the payroll so they can continue to have employment on their resume with the company.”

If you still get a check from the company, Bryan says you can still state on your resume that you are employed by the company. This is particularly important if someone has only worked for the company for a short time at the time of termination and can prove that they have been actively employed for a longer period of time.

How much money should you expect?

Most companies that offer severance pay are based on employment with a company. Frana said the general rule of thumb is that companies offer one week to three weeks of your salary for each year you’ve worked at the company.

If you have worked in the company for a year, you can receive between one and three weeks’ salary. But if you’ve been with the company for 10 years, you can get anywhere from 10 to 30 weeks of salary.

“If you’ve been valuable to the company, you could potentially get extra money or ask for extra money,” Bryan said. “But two years’ severance pay is usually the maximum. I don’t think I’ve heard of anyone in my career so far going longer than 24 months.”

Evaluate health benefits and compensation together

Aside from how much you get paid, another part of a company’s layoff offer is how quickly your healthcare benefits expire.

“I’ve found [health benefits] Go through the month the person is still on the payroll,” Bryan said. “So that’s another difference between someone staying on the payroll and being paid a lump sum.”

If you’re on payroll for two months or a year for your severance payments, your health insurance will often continue for that time as well, Bryan said. But when you take a lump sum, it makes it difficult for a company to continue your health insurance.

“That’s just how insurance companies work. If a person isn’t an employee, a company can’t pay its insurance premium,” Bryan said. “On the other hand, if you’re still on the payroll and receiving your regular salary, a company may also pay your insurance premium.”

In the currently tight job market, some companies offer more. In its recent layoffs, fintech Stripe said it was offering the cash equivalent of six months of existing health premiums or continuation of health care.

In the United States, regardless of how or if you are offered compensation, the Department of Labor requires companies to offer a temporary continuation of health care services previously offered to people while working at the company. This is usually at the employee’s expense and is required by COBRA or the Consolidated Omnibus Budget Reconciliation Act.

Although every company is different, they offer temporary coverage for about two months, Frana said. However, these continued healthcare benefits are not offered at the same prices they were offered to you as an employee and can get expensive for people who have just been laid off.

Challenger said the “headline number” of total weeks of severance pay was the hardest to negotiate, but peripherals like healthcare, which stay on the payroll longer, and PTO could have more leeway for employees to demand better terms.

Career help to negotiate a deal

While severance pay and health benefits are critical, there are additional resources that companies may offer in your layoff package and some that you can negotiate if they are not initially offered.

It’s important to help employees educate themselves about the parts of the package that don’t necessarily cost money or set major precedents, because HR typically tries not to, Bryan said.

Outplacement benefits such as resume reviews, career coaching, and interview training are important resources that companies may offer in their severance packages.

These are among the resources people need most when they’re laid off to help them get back into the workforce, said Lisa Rangel, the founder and CEO of Chameleon Resumes, a resume and job search consultancy.

“If the company doesn’t offer them directly, you can negotiate for them yourself,” Rangel said. “Or if they offer a flat, general outplacement benefit, you can also negotiate what custom services benefit you and see if they do.”

Other resources can include connection to the company’s alumni network and even access to internal resources such as attorneys for assistance with legal needs. When online payments company Stripe laid off employees in November, it offered former employees access to an alumni email address, as well as career and immigration assistance. The latter is extremely important for foreign Visa employees whose stay in the US is conditional on employment.

Although these services aren’t typically provided by every company, Bryan said an employee can and should always ask for what they need, and it helps if it’s not too expensive. If you’re not being offered what you need or think you deserve based on your tenure and performance, she added that like a job offer, everything is negotiable.

Wolfe said a company’s work goes beyond the expanded financial benefits. As a human resources manager, he said in a layoff situation: “My job is to help you as much as possible and help you get your next job, and companies, if they care about employees, want to help.”

“If you’ve never been in a layoff situation, you might not automatically think of negotiations,” Frana said. “You can always try to negotiate, whether there’s room for negotiation or not, you don’t know that unless you try.”

While a layoff is never ideal and often not expected, Bryan said you should always stand up for what you need and deserve.

“Severance payments can be good when you know they’re coming and you’ve made plans,” Bryan said. “But getting back into the job market takes resources, and it helps if you’re well-prepared for another company to take you on.”