When letting an employee go, Oregon employers do not have to offer a broad severance package. They only must pay what they owe their employees for work done, and in some cases, they may have to offer limited ongoing benefits, such as COBRA health benefits.
Still, many if not most employers in the Portland metro area will offer terminated employees a severance agreement and severance pay.
Many times, these agreements benefit both the business and the terminated employee. However, workers should think carefully before signing severance agreements as sometimes these agreements are not in employee’s best interests.
- Severance agreements often include waivers of important rights, including the right to sue for compensation if the employer engaged in unlawful discrimination, breached an employment contract or broke other employment laws. An employee should think carefully about whether they want to sign away these rights.
- The agreement will often include provisions preventing the employee from speaking about the agreement or making negative statements about the business. While recent changes in Oregon law have limited employer’s ability to insist on these provisions, employees still need to understand exactly what they are agreeing to say or not say.
- An employee should understand exactly what they are agreeing to accept as severance compensation and make sure that the compensation will meet their needs. It also may be important to compare how much the severance compensation is versus unemployment benefits, especially if the employee is waiving unemployment compensation as part of the agreement.
- Employees should make sure they understand how much time they have to consider the agreement. However, under Oregon law, employees have 7 days to revoke a severance agreement after they sign it.
When given a severance agreement, an employee should know their options
An employee in the Portland area who has just learned that they have lost their job will likely be trying to process a lot at the same time.
However, even if they are worried about making ends meet, they should make sure they understand their options before giving up important rights in exchange for a severance payment that might not be nearly what they really deserve.