Severance pay policy interpretation

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myrongains
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Severance pay policy interpretation

Post by myrongains »

Hey folks. I currently work for a megacorp and while planning my emergency fund details, found out what my company pays for severance in case of layoffs. I just want to clarify what this means exactly. The policy is as follows:

For employees earning more than $100,000 annualized base salary:

1.5 weeks base pay for each year of service.

- 12 week's base pay minimum
- 52 week's base pay maximum



As of July I will be hitting one year of service. Does this mean if I were to be laid off after July, I would be getting 12 weeks base pay + 1.5 weeks base pay? Or would I just get 1.5 weeks base pay?

Was confusing and I just wanted to clarify. Thanks

Edit: is it a bad idea to ask HR for clarification?
ZMonet
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Re: Severance pay policy interpretation

Post by ZMonet »

Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
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Re: Severance pay policy interpretation

Post by Parkinglotracer »

ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
I interpret it the same way. I would not call HR and ask them anything about getting laid off:)
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?

I just find it odd that hypothetically someone who was with the company for 2 months that got laid off would be getting three months of severance pay.

When I look at the calculation it seems that it would take 26 years of tenure to reach the full 52 weeks of base pay severance.. so maybe it really is 12 weeks minimum.


Thats absolutely insane! I was expecting 1.5 weeks base pay which would be like $4300.. but if it's really 12 weeks that's $39,000!!! That would cover nearly a year of my expenses without even dipping into unemployment benefits. Seems too good to be true.
Last edited by myrongains on Wed May 31, 2023 5:23 pm, edited 1 time in total.
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Beensabu
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Re: Severance pay policy interpretation

Post by Beensabu »

It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
"The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next." ~Ursula LeGuin
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
ZMonet
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Re: Severance pay policy interpretation

Post by ZMonet »

myrongains wrote: Wed May 31, 2023 5:21 pm
ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?
My mistake. I misread.

I think the 12 weeks makes sense given that it has been a common thought that it takes at least that long to find a new job for most white collar workers.
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TomatoTomahto
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Re: Severance pay policy interpretation

Post by TomatoTomahto »

Jeez. I thought this was pretty straightforward, and I suck at math but am good with English: y’all are going to turn this into the “bellhop riddle” before you’re done! :oops:
I get the FI part but not the RE part of FIRE.
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DeliberateDonkey
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Re: Severance pay policy interpretation

Post by DeliberateDonkey »

myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
The way the policy is written, they would get 12 weeks. Having a minimum is not uncommon, though I would say 12 weeks is quite generous. While it may seem unfair to someone who has worked there 8 years to get the same as a relatively new hire, I would argue that it is more damaging to the person who was only recently hired to have to turn around and job hunt with such a short stint on their resume (plus other costs that may have been associated with taking the job).

Of course, severance policies being modified in times of significant layoffs is not uncommon, so I wouldn't necessarily plan on getting those 12 weeks like it was cash in the bank.
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Re: Severance pay policy interpretation

Post by Beensabu »

myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
I think they'd just get 12 weeks.

It's all just interpretation on my part, though.
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Hacksawdave
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Re: Severance pay policy interpretation

Post by Hacksawdave »

I went through this four years ago. You get the 12-week minimum amount. The 1.5 to 2 months per each year of service is pretty much standard boilerplate in bid companies. I received one year even though I had nearly 40 years put in. Us seasoned veterans make up the cost difference for the newbies.

If you feel something is imminent, start preparing. Also, find out if your 401k match is trued up on departure by getting a copy of the Summary Plan Description (SPD) document.
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Re: Severance pay policy interpretation

Post by hoofaman »

That seems pretty typical for companies I have worked for, but every company is different. I was laid off from a big tech after 2 years and package was similar to that, although other stuff was included too

The 60 day warn period counted as part of it though

Until you are actually presented with a package it's hard to say what you will get, things can change, my old leadership also gave me accelerated vesting of rsu and bonus. Felt like I won a small lottery on the way out, and found a better job 2 months after that
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Re: Severance pay policy interpretation

Post by Dottie57 »

ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Agree with this.
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Re: Severance pay policy interpretation

Post by Dottie57 »

myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
No.
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

DeliberateDonkey wrote: Wed May 31, 2023 5:35 pm Of course, severance policies being modified in times of significant layoffs is not uncommon, so I wouldn't necessarily plan on getting those 12 weeks like it was cash in the bank.
Huh, well this puts a damper on things. I was prepared even before considering severance, but figured I could count on this 12 weeks as a guarantee. Have you known of any companies to reduce severance payouts during bad times?

Very grateful I keep my living expenses low, three months of base pay would last me 8+ months lol
Last edited by myrongains on Wed May 31, 2023 5:43 pm, edited 1 time in total.
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Re: Severance pay policy interpretation

Post by Dottie57 »

Dottie57 wrote: Wed May 31, 2023 5:41 pm
myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
No. Hat would be extremely generous. With lots of layoffs, this would hurt the bottom line too much.
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Re: Severance pay policy interpretation

Post by Yarlonkol12 »

myrongains wrote: Wed May 31, 2023 5:13 pm Hey folks. I currently work for a megacorp and while planning my emergency fund details, found out what my company pays for severance in case of layoffs. I just want to clarify what this means exactly. The policy is as follows:

For employees earning more than $100,000 annualized base salary:

1.5 weeks base pay for each year of service.

- 12 week's base pay minimum
- 52 week's base pay maximum



As of July I will be hitting one year of service. Does this mean if I were to be laid off after July, I would be getting 12 weeks base pay + 1.5 weeks base pay? Or would I just get 1.5 weeks base pay?

Was confusing and I just wanted to clarify. Thanks

Edit: is it a bad idea to ask HR for clarification?
Sounds like 12 weeks of base pay if you are between 0-8 years of service, and then an additional 1.5 weeks of base pay for each year of service above 8 to a max of 52 weeks
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Re: Severance pay policy interpretation

Post by Big Dog »

12 weeks
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Re: Severance pay policy interpretation

Post by FunnelCakeBob »

Beensabu wrote: Wed May 31, 2023 5:36 pm
myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
I think they'd just get 12 weeks.

It's all just interpretation on my part, though.
That's my read as well. Someone with 8 years of service gets 12 weeks of pay (8 years x 1.5 week/year = 12 weeks). The minimum is simply that, and not an addition to the 1.5 week/year calculation.

Getting 3 months minimum once you meet a year's service seems fairly generous. At least your company's policy starts everyone at a pretty high base.
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Re: Severance pay policy interpretation

Post by Jags4186 »

myrongains wrote: Wed May 31, 2023 5:42 pm
DeliberateDonkey wrote: Wed May 31, 2023 5:35 pm Of course, severance policies being modified in times of significant layoffs is not uncommon, so I wouldn't necessarily plan on getting those 12 weeks like it was cash in the bank.
Huh, well this puts a damper on things. I was prepared even before considering severance, but figured I could count on this 12 weeks as a guarantee. Have you known of any companies to reduce severance payouts during bad times?

Very grateful I keep my living expenses low, three months of base pay would last me 8+ months lol
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

FunnelCakeBob wrote: Wed May 31, 2023 5:49 pm
Beensabu wrote: Wed May 31, 2023 5:36 pm
myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
I think they'd just get 12 weeks.

It's all just interpretation on my part, though.
That's my read as well. Someone with 8 years of service gets 12 weeks of pay (8 years x 1.5 week/year = 12 weeks). The minimum is simply that, and not an addition to the 1.5 week/year calculation.

Getting 3 months minimum once you meet a year's service seems fairly generous. At least your company's policy starts everyone at a pretty high base.
Where does it say one year is required before the 3 month minimum?
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Re: Severance pay policy interpretation

Post by rob »

myrongains wrote: Wed May 31, 2023 5:13 pm Edit: is it a bad idea to ask HR for clarification?
Depends... Do you want to be on the list? If yes I think it's a pro move to ask about the policy on the off chance that someone remembers the name if time comes... otherwise No. I don't get why people think that HR is for employee protections and information???

The sev looks straight forward.
- Nbr whole (very probably) work years * 1.5 * weekly salary (probably calc from base as at notification date) with a floor of 12 weeks and ceiling of 52 weeks.

Some other topics that may or may not affect you...
- Annual bonuses are usually not in that nbr from my experience but some companies pro-rate a 100% bonus target - some just don't pay accrued part of a future bonus at all (possibly more common although not sure).
- Any RSU stock vesting probably stops on last day - although some seem to give an x day window past termination date.
- ESPP - I've only seen a refund of deductions during current offer period.
- ISO/NSO - do companies give those now? - Not sure.
- 401K vesting is sometimes accelerated, mostly not.
- Any accrued PTO balance - Some states require that paid out, some don't. Employer might go above state requirement when not required. Note that a lot of employers only vest theses over the full year even though they show the allotment at start of year and you can use the allotment, so don't be surprised if this is lower than you might expect.
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

rob wrote: Wed May 31, 2023 5:59 pm
myrongains wrote: Wed May 31, 2023 5:13 pm Edit: is it a bad idea to ask HR for clarification?
Depends... Do you want to be on the list? If yes I think it's a pro move to ask about the policy on the off chance that someone remembers the name if time comes... otherwise No. I don't get why people think that HR is for employee protections and information???

The sev looks straight forward.
- Nbr whole (very probably) work years * 1.5 * weekly salary (probably calc from base as at notification date) with a floor of 12 weeks and ceiling of 52 weeks.

Some other topics that may or may not affect you...
- Annual bonuses are usually not in that nbr from my experience but some companies pro-rate a 100% bonus target - some just don't pay accrued part of a future bonus at all (possibly more common although not sure).
- Any RSU stock vesting probably stops on last day - although some seem to give an x day window past termination date.
- ESPP - I've only seen a refund of deductions during current offer period.
- ISO/NSO - do companies give those now? - Not sure.
- 401K vesting is sometimes accelerated, mostly not.
- Any accrued PTO balance - Some states require that paid out, some don't. Employer might go above state requirement when not required. Note that a lot of employers only vest theses over the full year even though they show the allotment at start of year and you can use the allotment, so don't be surprised if this is lower than you might expect.
I did not want to ask HR, which is why I posted here. I know what you mean, I never considered HR to be a true help for an employee.

Our policy doesn't include anything except base salary, and our 401k is cliff vested so in the event of a layoff it is 100% vested at that point. Not sure about PTO or ESPP but I would assume the same.

I can't imagine that they would change the severance policy as we are in the manufacturing/renewables sector.. mass layoffs just don't seem realistic there, and the company is doing well. Either way, it's nice to know that the cushion is there. I wasn't expecting it before.
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Re: Severance pay policy interpretation

Post by FunnelCakeBob »

myrongains wrote: Wed May 31, 2023 5:52 pm
FunnelCakeBob wrote: Wed May 31, 2023 5:49 pm
Beensabu wrote: Wed May 31, 2023 5:36 pm
myrongains wrote: Wed May 31, 2023 5:26 pm
Beensabu wrote: Wed May 31, 2023 5:22 pm It sounds like maybe you would be getting 12 weeks base pay.

That means anyone making at least $100k with less than 8 years of service gets the same severance as those who had 8 years of service. And then those with 8+ years get 1.5 weeks base pay more than 12 weeks per additional year of service. And anyone with 34.7+ years of service is maxed out at one year of severance.
At first I didn't get where you came up with 8 years, but it makes sense now. Very interesting. I wonder if the 8 year person would get 12 weeks + (8*1.5) = 24 weeks though.
I think they'd just get 12 weeks.

It's all just interpretation on my part, though.
That's my read as well. Someone with 8 years of service gets 12 weeks of pay (8 years x 1.5 week/year = 12 weeks). The minimum is simply that, and not an addition to the 1.5 week/year calculation.

Getting 3 months minimum once you meet a year's service seems fairly generous. At least your company's policy starts everyone at a pretty high base.
Where does it say one year is required before the 3 month minimum?
Ooops...I misread your original post and thought that was required. You had actually said you're about to hit 1 year in service at this company.
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rob
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Re: Severance pay policy interpretation

Post by rob »

myrongains wrote: Wed May 31, 2023 6:05 pm Our policy doesn't include anything except base salary, and our 401k is cliff vested so in the event of a layoff it is 100% vested at that point. Not sure about PTO or ESPP but I would assume the same.
The accrued PTO might have to be paid out by state rules... so I would not assume that is a use it or loose it proposition. Here is a quick link that seems to show a summary but check your specific state.
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Random Poster
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Re: Severance pay policy interpretation

Post by Random Poster »

It doesn’t matter what the policy currently says.

What matters is what you actually get paid, if and when you get laid off and paid.

And HR is, in my experience, broadly and uniformly useless.

When I got laid off, I asked HR several questions, the actual answers to which they should have known. They gave me incorrect answers to every question.
Most experiences are better imagined.
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Re: Severance pay policy interpretation

Post by JD09 »

My megacorp gave a working 6 week notice period + accrued severance. I was not asked to work during the notice period - but still had access to company resources. If there is a mass layoff, chances are you will get a notice period + the lumpsum severance.
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Re: Severance pay policy interpretation

Post by exodusNH »

myrongains wrote: Wed May 31, 2023 5:21 pm
ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?

I just find it odd that hypothetically someone who was with the company for 2 months that got laid off would be getting three months of severance pay.

When I look at the calculation it seems that it would take 26 years of tenure to reach the full 52 weeks of base pay severance.. so maybe it really is 12 weeks minimum.


Thats absolutely insane! I was expecting 1.5 weeks base pay which would be like $4300.. but if it's really 12 weeks that's $39,000!!! That would cover nearly a year of my expenses without even dipping into unemployment benefits. Seems too good to be true.
Keep in mind that severance counts as income. You unemployment eligibility would not take effect until you've burned through the severance weeks.
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Re: Severance pay policy interpretation

Post by Random Poster »

exodusNH wrote: Wed May 31, 2023 10:19 pm
myrongains wrote: Wed May 31, 2023 5:21 pm
ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?

I just find it odd that hypothetically someone who was with the company for 2 months that got laid off would be getting three months of severance pay.

When I look at the calculation it seems that it would take 26 years of tenure to reach the full 52 weeks of base pay severance.. so maybe it really is 12 weeks minimum.


Thats absolutely insane! I was expecting 1.5 weeks base pay which would be like $4300.. but if it's really 12 weeks that's $39,000!!! That would cover nearly a year of my expenses without even dipping into unemployment benefits. Seems too good to be true.
Keep in mind that severance counts as income. You unemployment eligibility would not take effect until you've burned through the severance weeks.
Not if severance is paid in a lump sum, even if the amount paid is based on some weekly-year of service calculation.

At least that is how it is in Texas.
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rob
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Re: Severance pay policy interpretation

Post by rob »

Random Poster wrote: Wed May 31, 2023 10:54 pm
exodusNH wrote: Wed May 31, 2023 10:19 pm
myrongains wrote: Wed May 31, 2023 5:21 pm
ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?

I just find it odd that hypothetically someone who was with the company for 2 months that got laid off would be getting three months of severance pay.

When I look at the calculation it seems that it would take 26 years of tenure to reach the full 52 weeks of base pay severance.. so maybe it really is 12 weeks minimum.


Thats absolutely insane! I was expecting 1.5 weeks base pay which would be like $4300.. but if it's really 12 weeks that's $39,000!!! That would cover nearly a year of my expenses without even dipping into unemployment benefits. Seems too good to be true.
Keep in mind that severance counts as income. You unemployment eligibility would not take effect until you've burned through the severance weeks.
Not if severance is paid in a lump sum, even if the amount paid is based on some weekly-year of service calculation.

At least that is how it is in Texas.
Depends on state and how the severance is structured... In my state, if you have to sign a release (not going to sue etc etc) to get the lump sum, then UI can start and the lump sum is irrelevant - although it's obviously income. Not sure if it's paid as installments but I think it's the release that is important.
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FunnelCakeBob
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Re: Severance pay policy interpretation

Post by FunnelCakeBob »

exodusNH wrote: Wed May 31, 2023 10:19 pm Keep in mind that severance counts as income. You unemployment eligibility would not take effect until you've burned through the severance weeks.
Not necessarily true. This may vary by state and it depends on when the separation officially takes place.

Severance is income for tax purposes so you can certainly count on paying state and federal taxes. It (as well as PTO/vacation payout when you leave) is not considered as compensation eligible for 401k deduction, if it is paid after employment ends.
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myrongains
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Re: Severance pay policy interpretation

Post by myrongains »

Yea for now I am in Texas.

My dad recently lost his job and his severance would be paid as lump sum after a few pay periods, and he qualified for unemployment benefits already.
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Re: Severance pay policy interpretation

Post by dcabler »

myrongains wrote: Wed May 31, 2023 5:13 pm Hey folks. I currently work for a megacorp and while planning my emergency fund details, found out what my company pays for severance in case of layoffs. I just want to clarify what this means exactly. The policy is as follows:

For employees earning more than $100,000 annualized base salary:

1.5 weeks base pay for each year of service.

- 12 week's base pay minimum
- 52 week's base pay maximum



As of July I will be hitting one year of service. Does this mean if I were to be laid off after July, I would be getting 12 weeks base pay + 1.5 weeks base pay? Or would I just get 1.5 weeks base pay?

Was confusing and I just wanted to clarify. Thanks

Edit: is it a bad idea to ask HR for clarification?
This looks like standard language based on other employers I've had. In that case, it would mean 1.5 weeks base pay for each year of service. If that number is less than 12 weeks, then you get the 12 weeks base pay. If that number is greater than 52 weeks, then you get 52 weeks base pay.

By the way, I'm surprised there's actually a written policy on this. No employers I've had ever had one as they wanted to be flexible. In the end, each time there was a layoff, the general min/max formulas applied but the details changed depending on how big the layoff was and how stressed, financially, the company was at the time.

Cheers
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Re: Severance pay policy interpretation

Post by dcabler »

rob wrote: Wed May 31, 2023 11:29 pm
Random Poster wrote: Wed May 31, 2023 10:54 pm
exodusNH wrote: Wed May 31, 2023 10:19 pm
myrongains wrote: Wed May 31, 2023 5:21 pm
ZMonet wrote: Wed May 31, 2023 5:17 pm Doesn't hurt to ask HR. For what it is worth, I read it to mean you get 12 weeks, the minimum, if let go after 1.5 years.
Where did you get 1.5 years from?

I just find it odd that hypothetically someone who was with the company for 2 months that got laid off would be getting three months of severance pay.

When I look at the calculation it seems that it would take 26 years of tenure to reach the full 52 weeks of base pay severance.. so maybe it really is 12 weeks minimum.


Thats absolutely insane! I was expecting 1.5 weeks base pay which would be like $4300.. but if it's really 12 weeks that's $39,000!!! That would cover nearly a year of my expenses without even dipping into unemployment benefits. Seems too good to be true.
Keep in mind that severance counts as income. You unemployment eligibility would not take effect until you've burned through the severance weeks.
Not if severance is paid in a lump sum, even if the amount paid is based on some weekly-year of service calculation.

At least that is how it is in Texas.
Depends on state and how the severance is structured... In my state, if you have to sign a release (not going to sue etc etc) to get the lump sum, then UI can start and the lump sum is irrelevant - although it's obviously income. Not sure if it's paid as installments but I think it's the release that is important.
Yep - this has been my experience (lump sum) having been affected a couple of times in my career. FYI - I'm in TX. Didn't affect unemployment benefits eligibility or timing.

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RickBoglehead
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Re: Severance pay policy interpretation

Post by RickBoglehead »

Policy could not be clearer. Simple math, with mins and max.
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Re: Severance pay policy interpretation

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RickBoglehead wrote: Thu Jun 01, 2023 5:36 am Policy could not be clearer. Simple math, with mins and max.
You’re forgetting the first rule of the Bogle Club: nothing is ever clear. So, the bellhop says …
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Re: Severance pay policy interpretation

Post by Jack FFR1846 »

Having worked for a company who unbeknownst to me was preparing to sell itself, any current policies get thrown out the window when it benefits the company. Assume you're going to get zero severance and that you're going to have to fight to get any unused vacation time. Thinking you're getting severance is really asking for disappointment.
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Re: Severance pay policy interpretation

Post by humblecoder »

myrongains wrote: Wed May 31, 2023 5:13 pm Hey folks. I currently work for a megacorp and while planning my emergency fund details, found out what my company pays for severance in case of layoffs.
Before you start relying upon this severance as part of your emergency fund planning, keep in mind that policy is not necessary contract. Companies can and do change their policies. I have been on the receiving end of many policy changes during my time at my megacorp... and usually those changes are not to my advantage.

On the other hand, if the severance is baked into a contract, then that is a different story.
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Re: Severance pay policy interpretation

Post by RickBoglehead »

TomatoTomahto wrote: Thu Jun 01, 2023 6:03 am
RickBoglehead wrote: Thu Jun 01, 2023 5:36 am Policy could not be clearer. Simple math, with mins and max.
You’re forgetting the first rule of the Bogle Club: nothing is ever clear. So, the bellhop says …
One of the reasons I seldom visit.
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