Is My Severance Offer Too Low? How LA Employees Can Tell

If something feels off about your severance offer, trust that instinct. Most people who call us about their severance agreement have a gut feeling that they're being shortchanged. And most of the time, they're right.

Here's how to evaluate whether your offer is actually too low.

Signs Your Offer Is Below Market

Less than one week per year of service. The general benchmark in California is one to two weeks of base pay per year of service. If you worked at the company for eight years and they're offering three weeks, that's below the standard range. For senior employees, the expectation is typically higher, often closer to a month per year.

No benefits continuation. A severance package that's just cash and nothing else may be missing a significant component. Extended health insurance, outplacement services, and equity treatment are all standard parts of a competitive severance offer. COBRA premiums in the Los Angeles area can run $600 to $2,000+ per month for a family plan. If they're not offering to cover any of that, the effective value of your package is lower than the number suggests.

The deadline is suspiciously short. When an employer offers a below-market severance and gives you very little time to review it, that's a tactic. They want you to take the money before you realize it's not enough. A fair offer doesn't need a three-day deadline.

The release is very broad, but the pay is very small. Look at the ratio. They're asking you to give up every possible legal claim, agree to confidentiality, accept non-disparagement restrictions, and possibly a non-compete. In exchange, they're offering a few weeks of pay. The more you're giving up, the more you should be getting.

Signs You Have More Leverage Than the Offer Reflects

You suspect the termination was discriminatory. Were you the only person over 50 let go in a department that kept younger employees? Were you terminated shortly after disclosing a pregnancy or disability? Were you the only person of your race or gender affected? Under FEHA, these claims can be worth significant damages. A few weeks of severance doesn't come close to compensating for what you're releasing.

You were fired after complaining about something. If you reported harassment, safety violations, wage theft, or fraud, and were subsequently terminated, you likely have a retaliation claim. California has strong whistleblower protections under Labor Code Section 1102.5, and retaliation claims carry real value.

You have unpaid wages. Overtime you weren't compensated for, meal and rest breaks you missed, commissions you're owed, business expenses that weren't reimbursed. These are claims that exist independently of the severance agreement, but they also increase your leverage in the negotiation.

The circumstances look bad for the company. If the termination story would embarrass the company publicly, they have an interest in your silence. That interest should be reflected in what they pay for it.

The Evaluation Framework

To properly evaluate your offer, think about three categories:

1. What they're paying you. Total the cash, the benefits continuation value, and any other perks. This is the value of saying yes.

2. What you're giving up. The release of all legal claims, your ability to speak publicly, competitive restrictions. If your potential claims are strong, this side of the equation could dwarf the severance payment.

3. What your alternatives are. If you don't sign, what happens? You keep your legal claims, you can file for unemployment, you can pursue a lawsuit. The strength of your alternatives determines your leverage.

If what you're giving up is worth more than what they're paying, the offer is too low.

What to Do About a Low Offer

Don't accept it as-is. The first offer is the floor, not the ceiling. Accepting without negotiating leaves money on the table in almost every case.

Don't reject it outright either. Saying "no" without a counter-offer closes the conversation. Instead, respond professionally and indicate you'd like to discuss the terms.

Get a professional evaluation. A Los Angeles employment attorney can review your offer, assess your legal claims, and tell you what a fair number looks like. This gives you a foundation for negotiation, not just a feeling that the offer is low.

Make a specific counter-proposal. "I want more" isn't a negotiation. "Based on my 12 years of service, my strong performance record, and the concerns I have about the circumstances of my termination, I'm requesting X" is a negotiation. An attorney can help you frame this effectively.

The Cost of Accepting Too Little

Once you sign, it's done. If you later discover your termination was illegal, you can't go back and renegotiate. The release you signed covers exactly these situations. That's why it's worth taking the time to evaluate properly before signing.

Schedule a free consultation with our employment team. We help employees throughout Los Angeles evaluate their severance offers and push for what they actually deserve.