What Should Be Included in a Severance Package?

A severance package is essential, as it serves as a financial safety net for employees and, in some cases, a tool for employers to manage their workforce transitions. Understanding what should be included in a severance package is crucial for both parties involved, as it can significantly impact an employee’s post-employment life and a company’s reputation. As experts in employment law, the team at Linley Welwood understands the importance of providing comprehensive and fair severance packages to employees. That is why our experts have compiled information about what should be included in a severance package.

Key Elements to Include in a Severance Package

1. Financial Compensation

A severance package should include adequate financial compensation to help employees bridge the gap between jobs and maintain their living standards during the transition. Apart from a lump sum payment, it may include additional weeks or months of salary, and bonuses based on performance or length of service. While negotiating the terms of financial compensation, it is essential to consider the employee’s tenure with the company, their seniority level, and industry standards.

2. Benefits Continuation

Benefits continuation can be included in a severance package; however, before it is included, the benefits that will be continued will need to be negotiated between the employer and the employee. This includes healthcare coverage, retirement plans, and other similar perks employees rely on for their well-being and security. A well-crafted package should outline how long these benefits will continue after termination and offer assistance transitioning to alternative coverage options if necessary. This continuity can greatly alleviate an individual’s stress and uncertainty during their job transition.

3. Non-Financial Considerations

Non-financial considerations should not be overlooked in severance packages. Providing career transition support through outplacement services helps employees navigate their job search process and demonstrates employer goodwill. Offering assistance with resume writing, job interview preparation, and networking guidance can give employees valuable tools to land their next opportunity more quickly and smoothly.

4. Legal Protections

Providing legal protections within a severance package is crucial for both parties involved. This includes non-disclosure agreements to protect the company’s reputation and future job prospects. Employers may also consider including provisions covering intellectual property rights or non-compete clauses to safeguard their interests post-termination.

Do not hesitate to contact Linley Welwood for further information on employment law. Complete our online contact form, and we will happily answer any queries about our services.