Use The Family And Medical Leave Act (FMLA) To Negotiate A Severance Package

The Family And Medical Leave Act -Most common FMLA requests
FMLA's Most Common Reasons

It's been about ten years since I first released How To Engineer Your Layoff to the world. One of the chapters talks specifically about The Family And Medical Leave Act (FMLA).

The ebook is a niche product specific to helping people break free from a job they no longer care about by negotiating a severance. Growing old and being filled with regret is a terrible way to live.

Negotiating a severance is not easy. During a bull market, many jobs are more bearable as people tend to get raises and promotions.

Ironically, it's during a bear market where book sales will probably skyrocket. Employees nervously want try to figure out what's in their future during uncertain times. I just realized that my book is actually an income hedge. Sweet!

Negotiating Is Hard, People Want Easy

Figuring out a way to get laid off goes against the mainstream. This is why my book will probably never become a mainstream hit. Regular people don't want to take the risk of even temporarily becoming unemployed to do something else. They'd rather suffer in silence, or complain to their colleagues about their crazy micromanager bosses at the water cooler.

Alas, since the book's publication, book sales have only grown at a pedestrian pace compared to the growth rate of Financial Samurai's traffic. Creating your own product is not easy. But, everybody should give it a shot, especially in a low interest rate environment where cash generating assets are gold.

I didn't write my book to get rich and famous. I wrote it because I was going through an uncertain transition in my life after 11 years at one company. Plenty of other people I knew felt like getting out as well. Starting Financial Samurai during the economic downturn was my catharsis. And writing this book was my way of dealing with the fear of leaving a large paycheck for an uncertain future. Besides, if I didn't write the book fresh after receiving a severance, I knew I never would.

Over the years, I've learned a lot from book readers. Here's some new fascinating insight about using the Family Medical Leave Act to break free.

Using The FMLA To Break Free

Hi Sam,
Thought I'd share a success story with you. I purchased your book online.
I'd been working at my company for nearly 11 years and things changed a lot. I found myself in a role that I had no interest in and was not willing to stay in for long. It was very bureaucratic, unfulfilling, and soul draining. Fortunately, I had been negotiating a new job at another company and wished there was a way to get severance.

Using the guidance in your book, I suggested a hardship to my boss that I was facing with my aging parents in another state. I didn't even have to ask him to take time to think about it. He suggested taking some time to think and we'd reconvene in a week or so to discuss again.

At first, I didn't get a bite, but was told they don't offer volunteer layoffs, and it would set a bad precedence in the company, so it was off the table. We began exploring other ideas and FMLA came up. I'm not sure if they were bluffing, but when I began pursuing the use of FMLA, which I did intend to exercise, things quickly changed. The next day I was called in for an urgent meeting where a layoff with severance was offered. I accepted it with gratitude.

Then, I made sure the record indicated this was voluntary and they agreed. I was given three months severance which included a month of insurance for COBRA coverage! About a week later I left the company and got my severance check a week later.
Thank you for making your method available. My wife is happy and astonished and I can hardly believe it myself!

Everything Is Negotiable

Doug's feedback reminds us that everything is negotiable. It's up to you to bring the discussion to the table. Speaking to your employer about a severance may feel like you're going up against Goliath.

But I can assure you that you've got a lot more rights than you know, especially if you've been at your firm for a long period of time. Plenty of people I've consulted with over the past years have received severance packages when they originally thought it was impossible.

Let's look into what the Family and Medical Leave Act is. The details below come from the United States Department Of Labor.

Family and Medical Leave Act

The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

  • Twelve workweeks of leave in a 12-month period for:
    • the birth of a child and to care for the newborn child within one year of birth;
    • the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
    • to care for the employee’s spouse, child, or parent who has a serious health condition;
    • a serious health condition that makes the employee unable to perform the essential functions of his or her job;
    • any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or
  • Twenty-six work weeks of leave during a single 12-month period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

FMLA Protects Employees

FMLA essentially gives employees the ability to take care of life's many twists and turns without fear of getting laid off. You know, like getting fired after giving birth.

From an employer's perspective, twelve workweeks of leave is a long time to be without an employee, even if s/he is not paid. Therefore, you can see how an employer might be more open to negotiating a severance if you highlight your desire for FMLA because they are going to lose you anyway. The employer might as well find some amicable arrangement so they can get on with finding your replacement ASAP.

The last thing your employer wants to happen is for you to check out for 12 weeks and then just go through the motions for another several months before deciding to leave.That would be a massive productivity loss.

Understand Your Employer's Concerns

It's much better to have an open conversation to figure out how your departure can best help your employer. My employer was fearful that if I left, business would decline. Given I generated many multiples more in revenue than my compensation, losing revenue, market share, and client votes were all big risks.

Another fear my employer had was me leaving to go to a competitor. This happens all the time in the finance industry (or any industry for that matter), but I told them I wanted to retire from the business and do something entrepreneurial instead.

By offering to train my subordinate for as long as they wanted in order for the business not to fall off a cliff once I departed, I showed good faith. It was also my job to sell my employer they'd do better without me by highlighting how much they'd save in compensation cost, by laying off someone who didn't fully want to be there. If you're a good salesperson, you can convince your employer everything will be OK, which it was.

Since every employer is trying to maximize productivity, the FMLA is another powerful tool for severance negotiation. Utilize FMLA as skillfully as you would utilize asking for a sabbatical to plant the seeds of doubt in your employer's mind. If you do it well, a new journey awaits!

You can buy the book here: How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye or by clicking the buy now button.

I first published the book in 2012 and have recently expanded it to over 200 pages with new resources, strategies, and additional case studies thanks to tremendous reader feedback.

Add to Cart

Updated for 2022 and beyond.

24 thoughts on “Use The Family And Medical Leave Act (FMLA) To Negotiate A Severance Package”

  1. Good evening.

    I have been on family medical leave for about 11 days now. An email went out at my job for a buyout/severance pay. Would I still be eligible for that buyout being on family medical leave?

    Thank you in advance for responding.

  2. Thanks for sharing these goals. The big one missing for me is real estate. I still have no purchased anything yet. I am so hesitant to buy anything right now in Seattle with the current bidding wars. Any suggestions for this investment area?

    Currently have: 1/3 cash, 2/3 index funds/stocks/bonds
    Goal: $50k passive income by 40 years old (Current age 28)
    Savings Rate: 8k cash / month + 1.5-2k 401k per month

    I can’t even imagine having 200k in passive income. Honestly do not know how I would get there, unless I hit it big with RE.

  3. I have been reading this site for a few months for the early retirement aspect, I never thought I would be in this situation to negotiate a layoff.

    Lately, I am not too happy with the changes in my job responsibility and have reflected it to my manager, he didn’t seem to care about it and I think he just ignored my comment. Adding to this is that work has been so busy that my manager has asked me to change my pre-booked vacation multiple times.

    The catalyst came when my mother in law passed away last month, it was a shock and the whole family was unprepared, after taking a few days off for bereavement, my manager asked me to travel to work out of town knowing the circumstances of the death. I was ready to quit after that.

    Now that I have read your post, I now know quitting is a bad idea, I work in software engineering for 5 years in this company, what should I do now, I want to get out ASAP and didn’t have a chance to read your book yet and prepare for negotiation. Some people think that there might be a layoff coming later this year … I don’t know any HR people, they are located in another office … I am the top performer in my team and have really good relationship with the ppl in my team including my manager. He doesn’t know that I now think that he is an inconsiderate idiot.

    Any advice will be greatly appreciated!

  4. First of all, love the blog. I am a management-side employment attorney. It’s not often that your posts are within my substantive bailiwick, so I’d like to provide any guidance I can on this one. I can tell you that this strategy will often not work out because most employers would be extremely nervous about responding the way this employer did. Once an employee requests leave for a reason that qualifies under the FMLA, he has protections from retaliation by the employer. An employer would have to believe that the employee really did intend to exercise his right to take FMLA-qualifying leave and the “offer” of a negotiated lay-off in response to the employee’s request could be construed as retaliation. Here, it seems like Doug was fairly candid with his employer, which led to the mutually favorable result. But, what would have happened if negotiations broke down and they could not come to mutually agreeable terms? In other words, if Doug had not accepted the severance package the employer offered, Doug may have a claim or at least evidence of an anti-FMLA animus to support a claim down the road if things went further south. Please don’t shoot the messenger on this. I personally think it is a shame that employers and employees cannot have candid conversations about these things, but unfortunately the legal framework employers must work within creates an adversarial relationship where each side has to approach the situation with a certain level of distrust, or at least in an arm’s length manner.

  5. Great advice. I’ve been meaning to buy your book for a while now. I don’t anticipate wanting to negotiate a layoff in the near future. However, it’s such a contrary concept it would be a good skill to have available should the situation arise.

  6. Bryan@Just One More Year

    I couldn’t believe how much Doug’s letter sounded like my situation. The thought running through my mind – did I send this letter to Sam?

    There are some medical issues in my family that would be a great reason for using FMLA. A 12 week break to help with the family and reflect on my future would be most useful at this point. I look forward to the August 15 release date!

  7. Ali @ Anything You Want

    This is a very interesting strategy. I was recently able to negotiate an unpaid leave from my job. This was mostly because of timing; work was slow so it wasn’t essential that I be in the office. Good to know that this may be an option in the future, though.

  8. I’m so glad Doug had a positive outcome! I can’t thank you enough for how much your book helped me. Negotiating is hard and that definitely cast doubt in my mind for a long time before I decided to go for it. I don’t know anyone personally that has used FMLA as a negotiating tactic, but it makes a lot of sense.

    Here’s a link to a post I wrote about the details of my personal experience negotiating a severance package thanks to Sam’s book:

    1. I totally forgot about your own severance negotiation success until this past weekend. Makes me so pumped! It always feels so good to walk away with a win. Perhaps like retiring after winning Wimbledon, The Super Bowl, the NBA Championships, or whatever.

  9. I was a supervisor in a unionized food plant and some of the workers would abuse the heck out of FMLA. They would work one day a week and others would be forced to cover them. Unfortunately, due to the Union rules, they couldn’t be laid off or even moved to less critical jobs and everyone else had to deal with it. I never thought of the flip side of FMLA, however, in that it could be useful for engineering layoffs.

    1. Neither did I really, until a reader wrote in. As a supervisor, you’re annoyed right? So if a mediocre performer who has used FMLA before wants to negotiate something, I’m sure you’d be open for a discussion. Out with the old, in the with the more hungry!

      There’s always the possibility of working something out.

      1. Yes, everyone was annoyed-including the employees Union “brothers and sisters” who just wished our HR would just “fix” the issue. Unfortunately, HR doesn’t always have the courage to make tough decisions and everyone else is left dealing with the mess. FMLA is a little trickier since it’s Federally mandated but still, I’m sure something else could have been done.

      2. As a Union employee I can say that there are many of us that also disapprove of those that abuse FMLA. They make life harder on the rest of us. Although it’s not something that can usually be changed mid contract FMLA doesn’t stipulate that the leave taken is exclusive of any vacation time earned. A company can negotiate that any accrued vacation time must be used before FMLA kicks in. Many of us are my current employer see that coming in the next contract based off all the issues people abusing it are causing. If so all of us that don’t use FMLA will still have to pay the price if/when the time ever comes necessary that we do.

        1. The thing is… I don’t think many non-union employees even know about the FMLA. People just take sick leave, or short-term disability leave, or even worse, vacation days to take care of personal issues.

          Union life seems to bring about benefit abuse, more so than non-union life. Is that fair to say?

  10. I reckon I have a 50% chance of being laid off in the next two weeks. Funny thing is, it doesn’t really bother me. As long as they give me a littel severance I’ll probably just go to Alabama and sit on the beach for a week and read a book. Best case scenario I can either roll that into a sign on bonus or get some PE backing with mgmt team.

  11. I appreciate how you created a product to give people value, although its subject area is unlikely to make it a mainstream hit. The book takes on a unique path, which is refreshing. And like you said, it’s great to have an income hedge. Good luck on the upcoming book!

    1. Thanks Brian. Putting together a product takes a lot of time. There are so many details to go through in order for things to work and look right.

      It will be interesting to see what happens to the interest level of severance negotiation during a downturn. Now I’m thinking about what other products to create that would help people during the downturn. Good to think contrarian. And then during the downturn, product something that will help people maximize their money on the upswing.

  12. Thank you for yet another very helpful post. Looking forward to the new edition, and will purchase it, price increase aside. I’ve taken FMLA before, for an unexpected surgery/illness that thankfully was cured. I’ve always been athletic and active, even though physically a small person, but health issues can arise for anyone, and as you wrote, “things can turn bad real fast”. And though as a vet I don’t I could be injured by one of our patients, you never know: a colleague of mine was bitten on the wrist by a cat during a routine procedure, and a nasty nerve infection caused him to have to do consulting and teaching work. At 31, he wasn’t expecting that.

    1. Hi Robin – Thanks for your support. I’m updating the book to be as relevant as possible in today’s environment with more success stories

      I’m glad FMLA has helped you with the unexpected surgery and illness!

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