Leaving a Job Quietly Offers Some Benefits
Matt Murray
Mar 4, 2001
In the latest round of layoffs, severance pay often comes with strings attached.
Sometimes that's bad news. Amazon.com recently angered some laid-off workers when it asked them to agree not to criticize or sue the Internet retailer in exchange for 12 weeks of severance pay. If they said no, the company guaranteed just two weeks' pay. It dropped the gag order for hourly workers after getting complaints.
Coca-Cola wanted laid-off African-Americans who accepted severance pay to not participate in a race-discrimination suit, but the company was pressured into changing its mind.
Other companies simply offer extra incentives. General Motors employees who sign gag orders can get vouchers toward car purchases or other incentives. Rayovac, a battery maker in Madison, Wis., is offering bonuses to workers laid off in a plant closing in Wonewoc, Wis., if they stay on the job until their last scheduled day, and a second bonus to all workers if the plant closing at the end of June is orderly.
"We have found it benefits everyone and makes sure the closure is seamless," a company spokesman says. Workers who leave early don't get the bonus, but get their full severance, which is based on the number of years they worked at the plant.
Though some conditions can seem unfair, companies aren't required to do much for laid-off workers unless they're in a union or have some other kind of contract. As a result, laid-off employees may benefit from accepting some restrictions.
In addition, employees should consider the "first come, first served" aspect of many severance packages, says R. Craig Scott, head of Executive Law Group, an employment law firm specializing in negotiations on behalf of senior executives. Waiting too long to respond to an employer's initial offer might cost you, he says.
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As health-care costs soar, employers are passing more of the burden onto workers.
A recent survey of 360 large employers found that their health-care costs will increase an estimated 10.3% this year, while the cost of prescription-drug benefits will rise an estimated 14%. The survey found costs in health-maintenance organizations rising the fastest, though other popular types of plans also saw costs increasing about 10%.
Besides the rising price of drugs, costs are going up as patients and doctors rebel against strictures placed on them by HMOs, says Rich Ostuw, director of global health-care practice at consultant Watson Wyatt. The firm conducted the survey with the Healthcare Financial Management Association, a trade group of health-care professionals, and the Washington Business Group on Health, a nonprofit think tank formed by large health-care providers.
Workers often were spared rising costs during the economic boom, when companies were reluctant to pass them on because of their need for retention in the hot job market. But the current economic slowdown could "definitely" keep pushing up employees' share of the load "if things stay this way," Mr. Ostuw says.
In another survey by human-resources consultant William M. Mercer Inc., 40% of companies said they would increase employee contribution levels this year. Employees typically pay 30% to 40% of health-care costs.
Already, rising health-care costs have been a contentious issue for many unions in contract talks, including those with major auto companies and defense contractor Raytheon .
And it's not just corporate employees who are paying more.
In Houston, the city council last month approved a substantial increase in its new, three-year health plan for city workers. Under the contract with HMO Blue Texas, workers' premiums will remain the same for the first year, but co-payments for office visits, hospitalizations and prescription drugs will double.
Most plans for 2001 are already locked in, but employees can expect bigger increases in what they have to pay in 2002 and probably beyond. This may prompt some employees to review the options in their plan at work or switch to their spouses' plan.
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As e-mail becomes commonplace, bosses use it to deliver both good and bad news.
Motorola recently used electronic mail to spread the word about a layoff in its semiconductor sector. And at General Electric , Chief Executive John F. Welch Jr. sent a companywide e-mail to dispute a magazine report about layoffs.
Companies say e-mail is increasingly important as information spreads quickly via employees' own e-mail, TV news and other media sources.
"The flow of information is critical, good or bad," says GE spokeswoman Pam Wickham. "You've got to get information into the hands of your employees quickly. E-mail has just sped that process up. Before we had to fax memos, or have managers meet with their people."
But Chris Rosica, head of his own marketing firm in Paramus, N.J., warns that e-mail has limitations. "We use it for anything that needs to be communicated quickly, like updating our contact info," he says. But he stepped in when employees fell into a habit of carrying out disputes with bosses and each other via e-mail.
Moreover, he prefers to deliver bad news in person. "I don't manage by e-mail, I communicate," he says. "Sometimes e-mail can act as a wedge and people avoid the face-to-face."
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