Severance pay for the haves and have nots -- Page 2

Last week's Supreme Court decision may help older workers win lawsuits against their employers for age discrimination on the basis of "disparate impact," which is if older workers can show that they were impacted more severely than other workers by their employers' actions. Older workers no longer have to prove that their employers intended discrimination. But even if older employees are impacted more severely than their younger peers, that doesn't guarantee a win in court. Employers can get off the hook if they successfully argue that their actions were based "on reasonable factors other than age."

While employers aren't obligated to pay out anything to workers who lose their jobs, some -- especially large companies -- have a severance policy in place. Typically, a professional worker may get the greater of three months' salary or a week's pay for every year of service. If you're getting the ax at a sizable company, do some research. Check out the human resources policy manual before you sign any agreement.

But the initial offer didn't seem so generous to Susan. Her sister-in-law, a human resources consultant in Chicago, advised her to get hold of the company's H.R. policy manual. Since the H.R. department was located at company headquarters in a different state, Susan couldn't very well saunter over to someone's office to get a copy.

So she explored the company's Internet site during her last days on the job. A few clicks yielded a manual that outlined much more generous severance terms than the one she had been originally offered -- about twice as generous. "I felt like the archeologists must have felt when they discovered King Tut's tomb," she told me. "Only the treasure that I had stumbled upon I could claim as my own."

Of course, let's be real here. She confirms that her severance pay did not resemble the executive severance packages described above.

What you can do
If you're part of a mass layoff, you likely won't be able to negotiate a severance package. You'll have to take whatever's offered. But if you can successfully convince your boss to keep you on staff beyond the official layoff date, then you may be able to get better benefits.

For example, let's say the company needs your programming expertise to finish a project that you had started, and it keeps you on staff for an additional two months. Then you can ask for a better package, with additional weeks of severance pay, extended health insurance coverage, continued use of voice mail at your workplace after you're gone and outplacement services -- to name a few goodies that unemployed people can always use.

Experts say that it's always best to negotiate severance at the time you're getting hired. But unless you're going for a top-level position, where that's part and parcel of the employment package, broaching the topic of severance would be awkward for most. Who would want to ask, during a job interview, "So, explain to me the details about your severance policy."

Even though it may seem like a reasonable question during these times when job security is an oxymoron, it could very well raise some red flags and discourage a potential boss from selecting you from among the hordes of candidates applying for the same position.

So, there's only one sure way that you can truly protect yourself from the financial devastation of job loss: Prepare yourself for it. You know what I'm talking about. Build an emergency fund. Do it in a knee-jerk way that doesn't require much action beyond the initial setup. Divert a portion of your paycheck into a savings account, just like you do when you sign up for the company 401(k) plan. Pretend you're getting paid less than you are, and just live within your means. Try to set aside 5 percent of your take-home pay for your emergency fund, so it can quickly build up to a sizable amount.

Then, should you get bad news unexpectedly, you have something you can fall back on. Because let's face it, unless you're part of the elite class in the workforce, you can't expect someone else to protect your fall with a nice, soft cushion.