Most employees do not pay much heed to severance pay while they are employed or during the time of induction. It is only when an employee is terminated or retired would one focus on the severance pay that is being allotted. Severance pay is typically a certain sum of money and may include some additional benefits that are provided to an employee at the time resigning, retiring or being laid off. Severance pay can largely vary among companies and among states.
First, an employee should always know the nitty-gritty of severance pay. Any company would have all the details and policies governing the severance pay in the employee handbook or in the HR policies that are circulated from time to time. It is imperative for any employee to be very well accustomed with these terms and clauses. A company would never go against their own published clauses which is also why it is wise to learn the statutes that would determine the severance pay in different circumstances.
Some states strictly regulate severance pay and in some states, companies have a fairly free hand in determining the scope and nature of severance pay. As an employee, one should know the state laws and what the company has to offer. An employee resigning on his own accord was not initially inculcated as eligible for severance pay but over time, many companies do consider that to be a legit ground.
Severance pay may vary depending on several factors. Severance pay may be just the remaining wages and bonuses whereas in the most elaborate sense, it could include an additional payment, payment for unused leaves, insurance payments, retirement benefits and stock options if any. Some benefits could also be in store such as assistance in finding another job or something else.
If an employee takes three necessary steps then he or she would always emerge as a winner with the severance pay. First would be to study thoroughly the industry standards and what is acceptable as per the state laws. Second would be to completely read the employee handbook or the HR policies. Lastly, an employee can always consult with an employment attorney to get the clauses legally reviewed.
Severance pay is something that an employee is legally entitled to and when it is a right, one should always know every little piece of detail about it.