Questions to Ask About Severance Packages
Questions to ask HR or your employer when you are handed a severance agreement, covering the payment, health coverage, what you are signing away and how long you have to decide. Written for the days between being told and signing.
The questions
Open any question for the note
How long do I have to review this before signing?
Why ask it
Ask this first, because everything else depends on it. Many agreements come with a set review period, and some jurisdictions require a minimum for older workers, so a demand to sign in the room is worth questioning rather than obeying.
Can I take this away and have someone read it?
Why ask it
The answer is almost always yes, and being told otherwise is itself informative. Employers expect people to seek advice on severance agreements, and asking does not signal hostility.
How was the severance figure calculated?
Why ask it
Ask for the formula rather than the total: weeks per year of service, a flat amount, or a discretionary number. A formula can be checked against your record and against what colleagues were offered; a discretionary number is where negotiation happens.
Is this what my contract or the company policy provides, or is it more?
Why ask it
This separates contractual entitlement from what is being offered in exchange for signing. If the whole sum is something you were already owed, then you are being asked to give up your rights for nothing.
Will it be paid as a lump sum or over time, and on what dates?
Why ask it
Continuation payments can stop if the company runs into trouble, and they sometimes end early if you take another job. The payment structure also affects tax and unemployment eligibility, so get the dates in writing.
How will it be taxed, and what will actually reach my account?
Why ask it
Severance is generally treated as wages and can be withheld at a higher supplemental rate, so the net figure often surprises people. Ask for an estimate of the net amount rather than working from the headline.
What is my last day of employment, and is that different from my last day of pay?
Why ask it
The two dates are frequently different, and the employment end date is what governs benefits, vesting and insurance. Confusion here is one of the most common and most expensive misunderstandings in a severance.
When does my health coverage end, and what are my options after that?
Why ask it
Coverage often ends on the last day of the month rather than the last day of work, which can leave a gap. Ask whether the company will pay any continuation premiums and for how long, because that is frequently negotiable even when the cash is not.
What happens to my unused vacation, and is it being paid out?
Why ask it
Accrued leave is often owed to you by law regardless of whether you sign anything, so it should not be counted as part of the severance. Check the figure against your own records rather than accepting the number on the form.
What happens to my bonus or commission for work already done?
Why ask it
Earned but unpaid variable pay is where the largest sums quietly disappear, especially near the end of a bonus cycle. Ask for the specific treatment of anything you have already earned but not received.
What happens to my retirement contributions and any unvested equity?
Why ask it
Vesting usually stops on the employment end date, so a cliff a few weeks away is a concrete reason to ask for a later date. Ask also about the deadline to exercise options, which can be short and easy to miss.
Am I signing away the right to bring a claim, and against whom?
Why ask it
This is the core of what you are being paid for. Read what claims the release covers, whether it extends beyond the company to individuals, and whether anything is carved out, because a broad release is worth more than a narrow one and should be priced accordingly.
Does this include a non-compete, non-solicit or confidentiality clause?
Why ask it
Restrictions on your next job can cost far more than the payment is worth. Look at scope, geography and duration, and ask whether a clause can be narrowed, since employers often have more flexibility on wording than on money.
Can I say why I left, and what will you tell people who ask?
Why ask it
Non-disparagement clauses often run one way, and a mutual version is a reasonable request. Ask specifically what a reference will say and who is authorised to give it.
How is my departure being described internally and externally?
Why ask it
Whether this is a layoff, a redundancy, a resignation or a termination affects unemployment eligibility and how you can describe it to future employers. Insist that the written description matches what you have been told verbally.
Will this affect my unemployment benefits, and will you contest a claim?
Why ask it
Rules vary by jurisdiction, and severance can delay rather than disqualify benefits depending on how it is paid. An employer stating that it will not contest your claim is worth having in writing.
Is any part of this negotiable, and what would you need from me?
Why ask it
Asking what they need reframes the conversation as a trade rather than a complaint. Even where the cash figure is fixed across a group, references, dates, insurance premiums and restrictive covenants often are not.
Is anyone else being offered different terms?
Why ask it
Group layoffs in some jurisdictions come with a disclosure of the ages and job titles of everyone affected. Whether that list exists, and what it shows, can matter a great deal to whether the release is worth signing.
What outplacement or job search support is included?
Why ask it
Outplacement is often a service the company has already paid for, so refusing it gains you nothing. Ask what it actually consists of, since quality varies from a genuine coach to a login for a website.
What do I need to return, and what am I allowed to keep?
Why ask it
Get the list of equipment and access in writing, and ask about your own material: contacts, work samples, personal files on a company device. Collecting anything you are entitled to keep is far easier before your access ends.
Working through a severance agreement
Practical guidance for the conversation itself
In the first day or two
Do not sign in the meeting
Say that you want to read the document properly and will respond by a stated date. This is a normal and expected reply, and it costs nothing even if you end up signing the original terms unchanged.
Get everything in writing
Verbal assurances about references, dates or insurance rarely survive a change of HR contact. Send a short email summarising what you were told and ask them to confirm.
Gather your own records first
Your contract, offer letter, bonus plan, equity documents, leave balance and recent performance reviews are all harder to obtain once your access is switched off. Collect them before your last day.
Work out your runway
Calculate what the net payment plus savings actually covers in months, including the cost of health coverage. That number tells you how hard to push and how soon you need to be working.
What to read closely in the document
- The release: which claims are given up, and whether it covers individuals as well as the company.
- The dates: last day of employment, last day of pay, and when benefits end.
- Restrictive covenants: non-compete, non-solicit, confidentiality, and how long each lasts.
- Non-disparagement: whether it applies to both sides or only to you.
- Payment mechanics: lump sum or instalments, and whether payments stop if you find work.
- Anything about repayment or clawback if a condition is later found to be breached.
- Whether the agreement supersedes earlier documents, including ones that were better for you.
Where people lose money
Counting entitlements as severance
Accrued leave and earned wages are usually owed regardless of signing. If they are folded into the total, the real value of what is being offered for the release is smaller than it appears.
Missing a vesting or exercise deadline
Equity cliffs and option exercise windows run on the employment end date and are easy to overlook while dealing with the shock. Check both before agreeing the date.
Accepting a broad non-compete for a small sum
A clause that limits where you can work for a year can be worth far more than a few weeks of pay. Price the restriction rather than treating it as boilerplate.
Negotiating by grievance
Arguing that the treatment was unfair rarely moves the number. Specific, costed requests are the ones that get agreed: three more months of premiums, a later end date, an agreed reference.