How will my severance pay be calculated?
That’s a question we get from highly compensated individuals and other employees who are being laid off, who want to know what things will be like if they lose their position following corporate downsizing. It’s one of the primary reasons every employee should pay close attention to their employment contracts and company policy, and consult with an attorney if anything is unclear. With that in mind, let’s find out how to estimate severance pay.
How Will My Severance Pay Be Calculated?
There is no exact formula for calculating severance pay. The severance pay amount varies by contract, company policy, and industry. A common severance pay calculation for many employees is one to two weeks of pay every year served with the company. If you’re a higher level executive, you may be entitled to more severance pay if you have an employment contract which establishes a severance pay formula or the company has a policy which governs executive severance.
The upper 1% of the workforce, like CEOs, CFOs, and division presidents, the severance pay can get much larger. These upper level employees very likely have an employment contract which sets out the severance formula. These employees often receive a full year’s pay (or more).
What are some other items included in a severance package?
Remember, of course, that employers are not legally required to provide employees with severance pay unless an agreement requires the employers to pay severance. Other than that severance pay, other severance benefits can include accrued vacation payout, health insurance continuation, outplacement assistance, and other like benefits.
Negotiating a Better Severance Package
You should never rush to sign a severance package immediately. Losing a job is very emotional so employees should take time to consider any severance package. We recommend approaching this process slowly, with professional counsel, and with the aim of negotiating for the best pay package possible. The employer’s initial severance package is generally the opening offer. Many employees have received larger severance packages through negotiation with our assistance.
Employment Lawyers Can Help You Comprehend Severance Pay Terms
How can an employment lawyer help you get severance pay?
The most important thing a lawyer can do (regarding severance packages) is to facilitate comprehension and guide you through the final signing process. There are certain ways to lose severance pay, even after you have left the company.
Therefore, the severance contract is no different from any other legal document. Even if you think you understand and agree with everything in the contract, it’s very easy to overlook something. This could lead to problems later.
How Will My Severance Pay Be Calculated? Rowdy Meeks Legal Group LLC Can Help You Learn How
Severance packages are becoming more relevant these days because all employees are vulnerable to corporate downsizing. You don’t want to wait until you need your severance pay to understand how it works.
Rowdy Meeks Legal Group LLC can assist you with severance pay negotiations or filing a wage claim for lost earnings.
Contact us today for any questions or concerns you have about severance pay or any unpaid wages.