Given that severance pay is a gift, is there a standard calculation used?

Asked over 4 years ago - Andover, MA

Due to a job elimination, severance pay has been offered. Should years of services be considered in the calculation of the amount, and what else should an employee look for within a severance package?

Attorney answers (1)

  1. Michelle A. Perfili

    Contributor Level 13

    Answered . I believe what you mean is that severance pay is not mandatory. Many employers use a rule of thumb such as a week of severance for each year of service, however there is no strict guideline. Also employers, wary of wrongful discharge or discrimination claims, apply whatever the formula equally across categories of employees regardless of gender, race, creed or disability for example.

    You may wish to consider if your job was truly eliminated or whether it was a "pre-text" for an unlawful termination. Many employment lawyers offer a free consultation and can give guidance and may also review the document for a flat fee. Issues involving covenants not to compete or other restrictions on your future career moves should be discussed with your attorney.

    You may also contact the state agency (The Department of Fair Employment and Housing, for example, for those in California) or the federal equivalent (the Equal Employment Opportunity Commission, for all states) if you feel your termination might violate State of Federal Law.

    Good Luck and Good Law.

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