What to Know About Severance Pay in Ohio

What to Know About Severance Pay in Ohio.

Ohio is an at-will employment state — this means an employer can fire a worker at any time for any non-discriminatory reason. However, some employers may offer severance pay upon termination to protect their interests and provide financial stability to the employee while they look for a new position.

While employers are not legally obligated to provide severance pay in Ohio or under federal law, these agreements are often seen as a gesture of goodwill and can allow employers to be competitive in their industry. If you’ve been presented with a severance agreement, it’s vital to have an experienced employment law attorney by your side who can look over the document and ensure your rights are safeguarded.

What is Severance Pay?

Severance pay in Ohio is compensation that an employer provides to an employee upon the end of the employment relationship. It may include cash, health benefits, compensation for unused paid time off, continued perks, and stock options. In some cases, a severance package might also include assistance with helping an employee find a new position. Specifically, severance pay is usually offered when an employee is terminated due to no fault of their own — this can be caused by a lay-off or when a company downsizes.

Severance pay is generally calculated based on an employee’s salary and length of service. The amount might also be adjusted depending on the role the employee played at the company. Often, an employer will pay a week or two of salary for each year of service at the company. Some employers may also offer an age adjustment allowance for employees over 40 to ensure they are fairly compensated at the time of termination.

Can You Negotiate Severance Pay in Ohio?

Severance pay in Ohio can be negotiated at two points during the employment process — at the beginning of the employment relationship or upon termination. This allows you to ensure the agreement is beneficial to your interests. If you do not find the terms of the agreement satisfactory, you can negotiate the provisions included in the package or request an increase in the compensation being offered.

There are some common clauses that may be negotiated in severance agreements, including those involving the following:

  • The amount of severance pay
  • The duration of continued health benefits
  • The timing of the termination
  • Non-compete clauses
  • Non-disparagement clauses
  • Job search support
  • Release of claims

It’s important to have a skillful employment law attorney who can advise whether entering into such an agreement is in your best interests. Under the Older Workers Benefit Protection Act (OWBPA), employees who are age 40 or older must be provided with at least 21 days to review a severance agreement. They have an additional seven days to reconsider their signature. While there is no specific time frame required under Ohio law for younger employees to review a severance agreement, they must be given a reasonable amount of time to do so.

Should You Sign a Severance Agreement?

You should never feel pressured to sign a severance agreement. This is a crucial document, and there are various pros and cons that must be considered before signing one. While severance pay in Ohio can include a variety of benefits, it can also involve a trade-off. By signing a severance agreement, you may be waiving your right to sue your employer or take legal action for any wrongdoing they may have subjected you to — such as employment discrimination or wage and hour violations.

While the terms of every severance agreement can vary significantly, it’s essential to carefully evaluate whether you are being adequately compensated for the loss of your job and any legal rights you are foregoing. Accepting a severance package can also sometimes have unintended tax consequences by pushing you into a higher tax bracket. In addition, if the agreement included a restrictive covenant, it may have an impact on whether you work for a competitor.

However, there can be significant advantages to signing a severance agreement. For instance, it may continue your health benefits and provide you with assistance searching for another job. It can also provide you with financial stability while you are searching for new employment. A skillful attorney can discuss whether signing a severance agreement is right based on your specific circumstances.

Contact an Experienced Ohio Employment Law Attorney

If you have been presented with a severance agreement or have questions regarding severance pay in Ohio, a knowledgeable employment law attorney can provide you with the assistance you need. From our office in Westlake, Lalak LLC offers counsel to workers throughout Ohio for a wide range of employment law matters, including those involving severance pay. We encourage you to contact us for a free consultation to learn how we can help.