{"id":4650,"date":"2023-03-03T09:29:57","date_gmt":"2023-03-03T09:29:57","guid":{"rendered":"http:\/\/nycscreenwriter.org\/?p=4650"},"modified":"2023-04-03T11:08:29","modified_gmt":"2023-04-03T11:08:29","slug":"how-to-get-the-maximum-severance-pay-in-a","status":"publish","type":"post","link":"http:\/\/nycscreenwriter.org\/how-to-get-the-maximum-severance-pay-in-a.html","title":{"rendered":"How to get the maximum severance pay in a termination agreement"},"content":{"rendered":"
Severance pay and termination agreement – two terms that belong closely together. As a rule, the severance payment is the biggest benefit that employees get from a termination agreement. We clarify the most important questions on this topic.<\/p>\n
4 tips on severance pay in a termination agreement:<\/p>\n
No. It is not required by law that a termination agreement includes severance pay. Nevertheless, as a rule you should only sign if the employer offers a severance payment. This has the following background:<\/p>\n
If your employer wants to part with you, there are two possible options. Either he gives notice or you voluntarily give up your job by means of a termination agreement. A termination depends on high preconditions and entails the risk of a lengthy and expensive termination process in court.<\/p>\n
Employers try to avoid this by presenting you with a termination agreement. In it you voluntarily give up your job. This step is usually final. No protection against dismissal applies. No one can force you to agree – so why should you sign?? The answer lies in the severance pay. To make the termination agreement palatable to you, the employer offers you a one-time payment.<\/p>\n
So when negotiating a termination agreement, you should withhold your consent until the employer is willing to pay a reasonable severance package. Which demands you can realistically make depends very much on the individual case. An experienced lawyer for termination agreements can help you here.<\/p>\n
However, there are also cases where the employer does not offer severance pay. This is to be expected in these constellations:<\/p>\n
You can read more about the termination agreement without severance pay in the linked article.<\/p>\n
There is no blanket answer to this question. In practice, however, the following rule of thumb has become accepted for the amount of severance pay:<\/p>\n
0.5 gross monthly salary x number of years of employment with the company<\/p>\n
However, please note: This formula gives at best a first rough orientation. Experience shows that employers are willing to pay much higher amounts in many cases. This shows the following case from practice.<\/p>\n
The client represented by us had been employed by his employer as head of sales for only one year. The average gross monthly salary was approx. 20.000,00 \u20ac. The employer had terminated the employment relationship with due notice without a real, viable reason for termination according to the German Protection Against Dismissal Act (Kundigungsschutzgesetz).
The out-of-court negotiations, in which the employer would have had to pay a settlement in the amount of the o.g. Rule of thumb offered, led to no result.<\/p>\n
After filing a lawsuit with the labor court, we were able to negotiate a settlement with the employer in the conciliation hearing, according to which the employer was obligated to pay a severance payment of 70.000,00 \u20ac was obligated.<\/p>\n
This amount is exorbitantly higher than the average of comparable cases. If the "rule of thumb" mentioned above had been applied, the severance payment would have amounted to 10.000,00 \u20ac amount. However, since the employer had a very high interest in the termination of the employment relationship and our client had an excellent "best alternative", namely the continuation of the employment relationship, the employer was finally forced to accept the settlement. Loss of the legal dispute and the associated obligation to continue employment would not only have been associated with an enormous loss of image for the employer, but would also have been significantly more disadvantageous economically.<\/p>\n
As already indicated, the settlement amount depends crucially on negotiating skills. As a rule, the employer will present a termination agreement and threaten you with termination if you do not sign it.<\/p>\n
Now you have to convince the employer that a dismissal would not stand up in court. It must become clear to the employer that the termination agreement is the only safe option to part with you. Few employers want to engage in a lengthy termination process with an uncertain outcome. If you are proven right in court, the employer must not only pay you all of the back pay, but also reinstate you on top of that.<\/p>\n
As a layman, you will hardly be able to convince your employer that a dismissal would be unlawful. In order to achieve the maximum severance payment in your termination agreement, you should therefore consult a lawyer experienced in severance payments. Mr. Gradl is a specialist attorney for labor law and has already enforced numerous attractive settlements.<\/p>\n
Classic reasons for an unlawful termination and thus a high severance payment are:<\/p>\n
In some cases, the severance pay can be increased further by agreeing a so-called. sprinter clause. You will receive a higher amount if you leave the job before the agreed date. This is an option if you have already found a new job at this time. The employer thus saves social contributions and salary payments. Part of this saving goes to you in the form of increased severance pay.<\/p>\n
We advise you.<\/p>\n
Attorney Georg Gradl is an expert in termination agreements and an experienced specialist in labor law. Feel free to send us your questions by e-mail or give us a call.<\/p>\n
We offer you a competent initial consultation, which also includes a review of your documents, for a flat fee of \u20ac250.00 plus. VAT. at.<\/p>\n
If you would like us to take on your case after an initial consultation, we will of course discuss the expected further costs and the possibilities of having the costs covered by legal expenses insurance or by the employer with you before we take on the case.<\/p>\n
As a rule, this is not the case. Whether you receive a severance payment is usually irrelevant for unemployment benefits. However, note the following important exception:<\/p>\n
If you agree on an exit date in your termination agreement that is earlier than the expiration of the notice period, you must expect a so-called. Calculate rest period.<\/p>\n
Example: Assuming your notice period is three months to the end of the month (your actual notice period can be found in \u00a7 622 BGB or in the collective bargaining agreement\/employment contract). Am 4.5. sign a termination agreement. If your employer had given you notice on that day, you would not have left the company until the end of August. In the termination agreement, agree on an exit date before the 31st month.8., the employment agency generally imposes a sog. Rest period.<\/p>\n
This suspension period means that you will not receive unemployment benefits until later. In principle, you are entitled to the benefit only from the time when your notice period expires (in the example of the 1.9.). However, you must waive a maximum of 60% of your severance payment amount. The rest period can therefore also be shorter.<\/p>\n
Please also note that after a termination agreement with a high severance payment, there is a greater risk of developing a so-called "back pain". Have to accept a blocking period.<\/p>\n
You can find out more about the blocking period and suspension period in our article on unemployment benefits after a termination agreement .<\/p>\n
No, as a rule, severance pay is exempt from social security contributions.<\/p>\n
However, this does not apply to severance pay. "fake settlements". These are one-time payments that are not to be understood as redundancy compensation, but rather as compensation for outstanding claims arising from the employment relationship. Classic cases are:<\/p>\n
Social contributions must be paid on these payments.<\/p>\n
In addition, you have the option of voluntarily paying your severance pay into the pension insurance scheme. This may reduce pension reductions if you wish to retire before the actual retirement age. You may also benefit from tax advantages.<\/p>\n
You must pay taxes on the severance pay. Unless you are already subject to the highest tax rate, the high one-time payment often leads to an increase in your tax rate. You will have to pay significantly more taxes on the settlement than on the rest of your wages.<\/p>\n
You can smooth out this effect as far as possible by taking advantage of the so-called "suspension period". Apply for the one-fifth rule in your tax return. After that, your severance pay will be taxed as if it had been paid out over five years.<\/p>\n
The prerequisite for the applicability of the one-fifth rule is that the severance payment is paid within one calendar year.<\/p>\n
We advise you.<\/p>\n
Attorney Georg Gradl is an expert in termination agreements and an experienced specialist in labor law. Feel free to write us your questions by e-mail or call us.<\/p>\n
We offer a competent initial consultation, which also includes the examination of your documents, for a flat fee of 250,00 \u20ac plus. VAT. to.<\/p>\n
If you wish to instruct us to take on your case after an initial consultation, we will of course discuss the further costs to be expected and the possibilities of costs being covered by legal expenses insurance or by the employer with you prior to the mandate.<\/p>\n","protected":false},"excerpt":{"rendered":"
Severance pay and termination agreement – two terms that belong closely together. As a rule, the severance payment is the biggest benefit that employees get from a termination…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[9],"tags":[],"yoast_head":"\n