After a Job Layoff - What About Severance?

If you're worried about job security, you're notasked to return this paperwork the next day. The
alone. The sluggish economy makes the prospectonly exception is if you're 40 years or older: in
of further work force reductions a real fear forthis case, you have 21 days (by law) to review
many.the document.
What happens if you do lose your job? Are youThe larger the company for which you work, the
guaranteed severance?greater the chance that you'll receive some type
That depends.of compensation upon separation.
As a general rule, your employer is not obligatedThe amount of money you receive is usually
to provide you with severance pay upondetermined by the length of time you were
separation. However, there may be state laws,employed and/or your job level. Formulas differ
company precedent, terms in your employmentfrom one company to the next. For example,
contract, or collective bargaining agreementssome organizations provide one week of pay for
which dictate that you must receive it.each year of service. Others might base
The company does owe you for any unusedseverance pay ranges upon seniority, such as
vacation time, all regular and overtime hours6-12 months salary for executive level
you've clocked but haven't yet been paid for, andemployees, 3-6 months for middle managers, and
any bonuses which you earned and are due.0-12 weeks for nonexempt employees.
If you do receive severance, you will most likelyIf you're wondering why senior level employees
be asked to sign a general release in exchange;usually receive a more generous severance
this indicates that you will not bring any legalpackage, it's because it is highly likely that it will
action against your employer now or in the futuretake an executive a longer period of time to find
on the basis of wrongful termination. You won'tanother job at the same level. Executive and
have to sign it on the spot, but you'll probably beC-level positions are, of course, less plentiful.