When the notion of a settlement agreement arises at work, you may be happy or sad that you have to leave but you’re probably not too irritated about seeking legal advice. After all, most people prefer to not rock the boat as they think that it may affect their future employment potential. While you may be satisfied with your settlement agreement, Erik Gordon recommends understanding the following reasons as to why it’s good to hire a lawyer.
What is a settlement agreement?
This is a legally-binding contract between employer and employee generally used at the end of a term of employment. It can also be the agreement in place where there is a dispute to be settled but employment continues.
How are terms of a settlement agreement decided?
These terms should be mutually-agreed upon between the employer and employee. They are presented in a written agreement where the employee agrees not to pursue a case in exchange for a settlement payment.
Here are three legitimate reasons that you should consult commercial lawyers about your settlement agreement.
- To get the best deal
Whether as an employer or employee, you want to get the best deal possible. In order to determine the settlement, the following will be applicable:
- Annual salary
- Monthly take home pay
- The notice required by the employer
- The circumstances surrounding the settlement or termination of employment
- To ensure the agreement is legally-binding
Your lawyer will ensure that you understand your rights and what you are entitled to before you sign. The law protects the employee in this instance and good lawyers can advise whether they should negotiate a higher payment, or even refuse to sign.
- To avoid paying unnecessary tax
If an employer has agreed to a satisfactory settlement, it’s also important that you receive the money in a tax-efficient manner. Your lawyer can re-draft the document to ensure this. That way, the employer won’t have to pay any more money, but you can receive the full amount.