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Considerations Before Voluntarily Leaving Your Employer


Living with a serious or life-changing condition, you may find that your priorities change and you would prefer not to work for your current employer, or not to work at all. Before making a final decision, explore how it will impact your benefits and your overall financial picture.

If you decide to leave work, take the appropriate steps to preserve your benefits. You can also negotiate for whatever you want -- such as to keep your PDA or warm company jacket.

Consider each of the following subjects:

Check your benefits such as health insurance.

  • Unless you have a very deep pocket, it is not advisable to voluntarily leave your current job until you know how you will be able to continue the benefits you need -- such as good health insurance coverage.
  • One way to do this is not to quit until you have a new job with the same or better benefits to replace what you will lose. While new health insurance policies are not allowed to take pre-existing health conditions into account, a new employer may have a plan that still does. You may have to continue your current insurance during the period a new employer's policy doesn't cover pre-existing conditions. On the other hand, a law like HIPAA may prevent or limit the period of time a pre-existing condition can be excluded.
  • Alternately, have a plan in place to extend your benefits during your job search. For example, most people are entitled to continue health insurance benefits under a law known as COBRA. Under COBRA, instead of the arrangement you've probably had where you've only paid a percentage of the premium -- now you'll have to take over the entire premium. In fact, employers are permitted to charge you 102% of the premium -- the extra percentage to cover their costs in administering the benefit.
  • Also keep in mind that because of The Affordable Care Act ("Obamacare"), you may be able to purchase individual health insurance on the open market which will cover you until a new employer's coverage starts.
  • Extensions: With respect to your existing health insurance, find out if your coverage has an extension. Extensions aren't talked about a lot because they're free. Under an extension, coverage for a health condition that exists at the termination of a policy continues for a given period of time (up to 12 months) after a policy is terminated.
  • Finances: If possible, it  is advisable to have the resources to maintain the cost of your benefits before leaving an employer.
  • Check the Impact of Changing Jobs on Benefits.

Negotiate severance pay. Include payment for unused vacations and the like.

  • Negotiate payment for any unused benefits to which you are entitled. This includes:
    • Unused vacation.
    • Personal days.
    • Sick days.
  • Your employee handbook will generally indicate what happens to unused benefits should you leave.
  • Your employer may offer a lump sum severance package based on a formula tied to the number of years that you have worked. There's no reason why you can't receive the lump sum package, plus payment for unused benefits.

Decide whether to exercise stock options if you have any.

  • Evaluate any stock options you may have before leaving your current employer. If they have value, and if you will lose them if you leave, will you obtain an equal value in a new job – or satisfaction that is so much greater than your current job that it’s worth taking the financial hit?

Get a reference from your current employer in case you decide to look for a new job.

  • Ask about what kind of reference your employer will give you. If possible, get a copy of a reference letter before you stop work.
  • If despite your best efforts, you fear that an employer may not provide you with a glowing reference, consider sending the employer a letter indicating that you do not want any information given out about your employment other than the dates of your employment and your salary. Such a step is not recommended unless you have other references, either personal or professional, that can fill the gap.

Negotiate for what you want, including other items you want to take with you.

  • If you want anything else from your employer, from use of your office for a while, to keeping the company car, negotiate for it.
  • Your bargaining power depends to a large extent on how much your employer supports your leaving. If you have been having problems at work and need to move to a less stressful, or otherwise, healthier environment, your employer may be just as anxious for you to go as you are to leave. That may translate into an ability to negotiate more than an employer typically offers terminating employees.
  • Some items to consider negotiating about:
    • Ask the employer to pay for continuation of your health insurance -- any where from a few months to 18 months.
    • Payment for unused sick leave, even though the employer doesn't normally do so (You are vested in any unused vacation pay so your employer must pay for that);
    • A severance payment equal to one month's pay for each month you've worked for the employer -- or even more severance if you've made the employer a lot of money or helped its business significantly.
    • Other concessions such as agreement to contribute to your 401(k) at year-end, provide the Christmas bonus early, etc.
    • A reference in writing.
  • Whatever you negotiate, be sure to confirm it in writing.
  • Preferably prepare a written agreement that can be signed by each party.
  • At the least, prepare a simple letter agreement to be signed by the employer stating what has been agreed to, when you will received the money and other agreed upon items.

Be careful about what you say in an exit interview

  • Exit interviews are not confessionals. It does not matter whether they are exit or interviews to obtain a job.
  • Keep your negative opinions to yourself. There’s good reason why the statement “Never burn your bridges” has become a cliché. There is no telling who will learn what you say in an exit interview or how it can come back to haunt you.
  • You will likely need a reference from your employer in the future, particularly if you have been with the same company for an extended period of time. Even if you get a reference in writing, there may be additional contact with a former employer. Who knows? The fickle finger of fate may even lead you to want to rejoin your employer at some future date.

NOTE: If you are thinking about looking for a new job, see Should I Change Jobs?, Seeking New Employment, Benefits To Review Before You Agree To Change Jobs.

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