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Frequently asked questions regarding severance pay

On Behalf of | Nov 14, 2022 | Employment Law |

Losing a job is rarely ideal. Such circumstances can leave any worker with feelings of uncertainty and discomfort.

Luckily, for some Michigan workers, their employer may offer severance pay upon their dismissal. While not legally required in most states, businesses may provide workers with severance to avoid a PR nightmare. Ultimately, this can benefit workers, as it can prevent their income from disappearing overnight.

While an employee may feel overwhelmed regarding their termination, they may want to address the following questions regarding severance pay.

How much severance do employees typically get?

This often depends on how much their company is willing to offer. In some cases, companies may have a severance formula. For example, employers may offer two weeks’ worth of salary per the number of years the employee worked at the business.

When do people get offered severance pay?

Usually, severance gets offered to laid-off workers. But these are some other circumstances that could qualify workers for severance benefits:

  • The employer thought the worker put in a good-faith effort but was not the right fit for the company.
  • The demands of the job changed after an employee got hired, so the employer deems them not at fault for their poor performance.
  • An employee’s termination was due to poor performance and not inappropriate conduct.

Can workers negotiate for more severance pay?

In most cases, they can. But whether they get it or not usually depends on the employer. For example, if the employer encouraged the worker to turn down an offer at a different company to work for them, the employee may be able to argue for more severance pay for showing loyalty to the company.

Take time to think before settling

If employees get offered a severance package by their employers, they should read over the details before signing off on an agreement. By doing so, they could increase their chances of getting a better deal.