How Does Severance Pay Vary Across Different Industries?
Severance Pay Vary Across Different Industries
When a company is in financial difficulties or needs to downsize, it may need to let employees go. This isn’t a great choice, but it is a necessary business move for the employer to keep its doors open. One way companies try to make the transition less harsh is by offering severance pay. But what is severance pay exactly, and how does it vary across different industries?
According to employment lawyers, severance pay is compensation an employee receives as they depart a job. This can be a lump sum or regular payments over a specified period. In some cases, it can also include vacation and sick leave. Generally, the amount is determined by a formula that takes into account years of service. It can also be based on a person’s salary and their job title.
A company may also be required by law to severance pay. This includes severance pay for those who are laid off without cause, which means their termination is not the result of their own actions. For instance, a company that is laying off employees due to economic difficulties must still offer them some form of severance package.
How Does Severance Pay Vary Across Different Industries?
Some severance packages also offer outplacement services to help former employees find new jobs. This can include resume writing, interview coaching and other support to help them get back into the workforce more quickly. This is especially helpful during large-scale layoffs.
Many companies will also extend healthcare coverage for a period of time, so that former employees have access to medical benefits until they find new jobs. This can be particularly important in highly regulated industries, such as banking and air transportation, where the company must comply with federal regulations.
A big factor in how much severance pay Ontario an employee receives is the reason for their termination. Depending on the industry, this may mean that a person who was terminated due to poor performance is unlikely to receive as much severance pay. Those who were laid off due to a company restructuring, on the other hand, will likely receive more substantial packages.
Another big factor in severance pay is the size of the company. Larger companies have more resources and can often afford to offer more generous packages than smaller companies. In addition, some employment contracts and company policies may outline specific severance pay amounts.
While it can be tempting to take the first severance package offered, it is important for people to understand their rights and seek legal representation. A lawyer from a firm like Samfiru Tumarkin LLP can use various laws and factors to determine how much severance pay a person should receive, then negotiate with their employer for that figure. This can increase the value of a severance package by tens of thousands of dollars. In the end, it is often worth pursuing these legal options to get what you deserve when you lose your job.