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Severance pay can ease dismissed employees’ anxiety

| Jan 2, 2020 | employee rights |

Losing a job can be a worker’s worst nightmare.

Sometimes, the dismissal can cause workers to get worked up. However, some employees could get severance from employers. That way, they don’t have to worry about their income disappearing overnight.

Here in California, businesses are not legally required to give out severance pay. Still, many choose to do so to maintain a good reputation.

Amount of compensation depends on the company

Because every company is different, not every single one of them will use the same model. Often, employers may offer two weeks’ pay for every year the employee worked at the business as their severance formula.

How severance can get used in employee termination

Typically, severance pay gets reserved for workers who got laid off. But these are some rare instances where terminated employees could also receive severance:

  • Company believes workers made good-faith effort: If a worker gets fired for poor performance, but the business thinks they put in their best effort to do the job, the company may reward them with severance pay for their devotion and hard work.
  • Demands of the job changed: Sometimes, the original requirements of an employee’s job can change. Depending on the circumstances, employers may not consider the employee to be at fault for not meeting expectations since the change in requirements were out of their control.
  • Employer worries the worker might sue: An employer may want an employee to sign a severance agreement regarding their termination, saying they won’t sue the company. While this is often a rare occurrence, some companies may worry a worker was subject to illegal activity by the business during their employment.

Most workers who quit can’t get benefits

Typically, severance benefits are for people who got dismissed involuntarily. However, there are some exceptions to the rule. For example, if a worker knows their job is not going well, but the employer chooses not to fire them, the employee may be able to work out a deal with the company that includes a severance package.

Workers shouldn’t settle for an initial offer

The uncertainties of unemployment can create anxiety for anyone. Dismissed workers often wonder when they will find their next source of income, pay their bills and even feed their families. If a worker’s employer offers severance pay, that could give them a safety net, lowering their. However, workers shouldn’t just sign the initial agreement handed to them and try to get a better deal if possible.