What’s ‘normal’ when calculating severance? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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What’s ‘normal’ when calculating severance?

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Question: "Is there a rule of thumb when it comes to determining severance for an employee?  What factors should be considered when calculating severance (length of service, position in company, etc.)?  What seems to be the “norm” in this economic time?" — Sheri Thomas

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{ 7 comments… read them below or add one }

Jocelyn June 15, 2009 at 10:06 am

Luckily being in central Massachusetts we have had less difficulty in this area because we have not had to let any employee go because of the economy. But when a person is laid off, what we do is offer them cobra (at their expense) and pay them any owed vacation time. So no severance pay. If we fire with cause then they are not even allowed by the state to collect unemployment.


Tori June 15, 2009 at 8:39 am

This is capped at 1 – 2 years.


Tori June 15, 2009 at 8:23 am

Length of service – 2 weeks for every year worked, except if it’s an executive position. Medical coverage is paid for during that time. Then, the Cobra kicks in if they want it. Unused vacation days are paid out to employee.


Mark June 13, 2009 at 8:43 am

We don’t do severance pay. If someone is let go (whatever reason), they are let go.


Barb G June 12, 2009 at 4:28 pm

When we do severance (rare), we give two weeks regardless of the length of employment.


Fellow Admin Asst June 12, 2009 at 3:44 pm

We have 1 week per year worked and max out at 10 years. I think this maxing out at 10 years is generous in today’s market. Most others I know of max out at one month pay.


HR Rep June 12, 2009 at 3:38 pm

We use 2 weeks’ pay plus 1 week’s pay for each year or fraction thereof of continuous service, up to and including a maximum of 26 additional weeks (max pay = 28 weeks).


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