What is Severance Pay?
Severance pay is money that an employer might want to provide for an employee who is leaving their employ. Normal circumstances that can warrant severance pay include layoffs, job elimination, and mutual agreement to part ways, for whatever reason.
Severance pay usually amounts to a week or two of pay for each year the employee supplied service to the company. For executives, the severance pay may even constitute up to a month’s pay for each year of service. In some instances, a severance package might also include extended benefits and outplacement assistance
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