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What is a fair severance package?

| Nov 26, 2020 | Employment Law for Employers |

If you are about to lose your job, you may have hope for a severance package so that you have money and other benefits to hold you over until you can find new employment. However, if you have never received a severance package before, you may not know what would be fair.

CNBC explains that you should keep in mind severance packages are not a legal requirement for your employer. In short, getting any type of severance is a nice gesture on the part of your employer. The only exception is if you have a contract that spells out the severance package details.

The average offer

A standard severance package would usually include payment based on your length of employment. The typical pay is one or two weeks per year of employment.

The package will also often include any unpaid time you have for vacation or personal days.

The fair offer

In general, a fair package is something comparable to what others receive from the company. The downside to this is that if the company is not giving anyone a severance, then you probably should not expect one.

The problem

One of the biggest issues that can impact any severance package is if the company you work for is going out of business or filing bankruptcy. In such cases, there is likely not money to pay you a severance package. Even if you do have a contract, you may not receive your pay, and collecting anything the company owes you through the legal process will be tough since the money is not likely there.