So you’ve come into work to find out it’s your last day. Years of service, age, position, industry and level of compensation all factor into a severance package, says Michael Wright, an employment lawyer with Cavalluzzo. But unless terms are spelled out in an offer letter or written employment agreement there’s no set rule to determine a payout, he warns. As these purely illustrative examples show, packages vary. Seek legal advice if you ever find yourself in this position.
See which of the below scenarios most applies to you.
Name: Young and Employable
Salary: $45,000 (plus 50% off company services)
Possible severance: Three months or $11,250 (plus continuation of 50% discount for that period)
Employers might push for two months, but it’s tough to land a job in eight weeks. Don’t expect much more than that. Someone at this age and experience should have an easier time finding an equivalent job and pay than someone in a more senior role with more experience.
Name: Mid-Life Crisis
Position: Junior manager
Possible severance: 12 months or $88,000 (plus benefits and bonuses)
At age 45 most workers are still very marketable, but it could take time to find equivalent employment at a similar income level. It ’s worth noting, though, that someone who has worked a few years more or a few years less might b e entitled to the same severance. That’s key. You don’t just multiply years to come up with a severance payout.
Name: Not Ready to Retire
Possible severance: 24 months or $240,000 (plus pension contributions)
Being laid off near retirement age doesn’t mean you can afford to retire, or even want to. A big payout is possible, provided the affected employee is diligently looking for new work. Collecting a pension shouldn’t affect severance either, as it is essentially a form of deferred wages.