Severance packages a thing of the past?

February 18, 2009 9:18 AM

Severence package in the current economy?

I've been with my current company for over four years. I started as a temp and within a few months was hired on as a FT permanent employee. It's a very small company and office, so early on I was the only Admin. Within months I was promoted from receptionist to Exec Admin and then Office Manager. By that time we'd hired a FT receptionist and two accounting people. I did pretty much everything except the accounting, and did it well. My reviews were flawless. At the first one my two supervisors had nothing negative to say at all. It pretty much came down to they really enjoyed working with me and were very happy with my work. The second review was pretty much the same and I got a higher than expected increase in salary. All was well and life was good.

The nature of the business is real estate development. Over the last 2 years, two projects have failed. Thankfully my boss has several other businesses and projects in the works and he was able to keep me employed working on many of these projects.

Fast forward to late last year. I was assigned two projects that have been shakey from the start. There was less and less for me to do as these projects worked their way through funding and city approvals, etc. Bossman told me that my hours were going to be cut back until these two projects got going. I was surprised because no one else in the office was having their hours cut back, but what could I do.

I emailed my boss yesterday to see when I would be getting paid for the last half of January. I also asked a couple other questions having to do with my health care coverage and why I was the only one who'd had their hours cut. Well, he wrote back that one of the two projects' funding had just been cut and would not be coming through and that "if you can find other employment, you should take it". Sounds pretty final, huh.

Based on what's happened in the past, I intend to go in and ask for a severence package. Bossman has always taken care of his employees, but I'm not sure if in this economy that practice still holds true. In the past he's paid for one gal's health insurance for 3 months, and set up another struggling gal in an apartment (paid for the movers, 1st & last, etc). Of the current employees I've been there at least 2 years longer than any of them.

Would I be out of line to ask for (and expect) 6 months of health insurance (med & dental) and $4k severance pay ($1/year of employment)? What else, if anything, can or should I ask for? I know times are tough, but I've been there a long time and always done a good job.

I need to go in prepared and could use some guideance. Thanks!

posted by SoftSummerBreeze to work & money (9 comments total)

and set up another struggling gal in an apartment (paid for the movers, 1st & last, etc).

Not knowing the parties involved and reading that at first glance I find myself wondering, was there more than meets the eye going on there? Because that is clearly going above and beyond. I could be way off the mark here, but, it does seem a bit odd.

As for severance, you can ask, the worst thing that can happen is he says no.
posted by a3matrix at 9:25 AM on February 18

was there more than meets the eye going on there? Because that is clearly going above and beyond. I could be way off the mark here, but, it does seem a bit odd.


If you're asking about Bossman's treatment of other/past employees, no. He's always helped out the "needy" employees. The gal with the apartment, she was dating a homeless guy. (Truly!) We were trying to get her to see the light of day and get her away from him. He was verbally abusive to her and obviously, it was not a good situation for her to be in and still perform well at her job. The other gal was 19 when we hired her. She was living with her boyfriend and got pregnant. I've never seen any pregnant person have so many doctor appointments upon hearing she's pregnant. She was out of the office more than she should have been and when she was there, she barely did anything productive. WHY she received the extended benefits she did was beyond me, but I chalked it up to Bossman just taking care of her like he had others in the past.

Me, I've never been "needy" like this, so I'm wondering if he'll feel motivated to extend any offers to me or if he'll just assume that I'll be fine because I always seem to land on my feet. Given my length of employment and that I actually worked while I was there, I should hope so, but then again, given the current economy and a business that's failing, I don't know what to expect.
posted by SoftSummerBreeze at 9:43 AM on February 18

Well it is certainly worth talking to him about. Losing your health care coverage is going to put you in the "needy" category. No one can afford COBRA so if he were willing to at least give you some consideration there that alone would be worth it.
Good luck with everything. I wish I could offer more than words to help out.
posted by a3matrix at 9:51 AM on February 18

I strongly suggest that you research the impact of the new Stimulus Bill on COBRA (insurance continuing after you are unemployed). There is a provision in the Bill that provided for a federal subsidy for COBRA (I believe it pays 65% of the cost of your insurance, leaving you to pay the rest -- the employer is reimbursed through a reduction or credit in payroll taxes, I think).

Anyway, look into it. It might affect your calculation on how much insurance to ask vs. cash.
posted by driley at 10:03 AM on February 18

Be careful, though, the COBRA subsidy only applies to involuntary termination.
posted by Pax at 10:45 AM on February 18

You might also ask about staying on the insurance for a while if you pick up the full tab. It'll be cheaper than COBRA. I've done that with small employers in the past. I don't know the exact mechanics but I think essentially they put you on an unpaid leave instead of officially terminating you. That allows you to stay eligible for the group insurance for at least a while.
posted by COD at 1:31 PM on February 18

my personal experience has been that severance packages are a thing of the past. nine of my friends have recently been "separated from employment" as have i. none of us got severance packages, even though at least one of them had been with the company for over a decade.

frankly, i think it's pretty naive of you to expect 6 months of health insurance (med & dental) and $4k severance pay. especially in this economy, and especially when your company's projects are failing.
posted by misanthropicsarah at 2:59 PM on February 18

As a point of reference, the (very large) software company I work for is giving laid off employees 2 weeks base severance + 1 week per year of service. So for four years, 6 weeks' severance. I would consider this generous.
posted by charlesv at 2:59 PM on February 18

In the San Francisco Bay Area (like everywhere probably), developers are really hurting. I heard from a large architecture firm -- can this possibly be true? -- that no residential projects are moving in the City of San Francisco. I've heard of a bunch of projects going or nearly going bankrupt, and it sounds like your company is similarly struggling. In that context, it's going to be difficult for you to get severance, though it's certainly worth a try.

Since he's not shutting the door firmly, I'm not sure I'd jump to the conclusion that things are totally over and I'd be careful about having these negotiations shut the door more firmly than necessary. I'd maybe ask him if you couldn't stay involved helping them a few hours a week, stay on the insurance plan, and then when the projects pick up again later maybe get re-involved? If you find another job, you can always leave officially then.

Also, and I hesitate to raise this point because I'm sure I don't have a lot of relevant information, but are you sure you know the full story here about what's going on? Are you the project manager? If so, why is he the one who knows what work you should be doing on the project and whether the funding came through? If you're just assisting him or someone else, all of this makes much more sense, so ignore me. But all that, combined with "I was surprised because no one else in the office was having their hours cut back" makes me wonder if there's a small chance something else is going on. Maybe a broader discussion about how you can be more useful to the company, or useful in ways beyond this project, would help?

Most likely, though, it's the general economic fiasco, lack of funds to borrow, developers going bankrupt, and so forth. Best of luck with the severance.
posted by salvia at 9:15 AM on February 19