Can Severance Pay Be Offered For Temporary Employees?

Severance Pay Be Offered For Temporary Employees

Severance pay is compensation offered by companies to departing employees to soften the blow of being let go and provide them with a financial cushion while they search for a new job. Generally, severance packages come with a stipulation that the employee cannot sue the company or speak badly of it after leaving.

Most companies offer severance packages to employees who are being laid off or terminated for reasons beyond their control, such as budget cuts, an acquisition or a corporate restructuring. The amount of severance pay an employee receives can vary, but it is typically around one or two weeks of salary for every year they have worked at the company.

In some cases, severance packages also include other types of pay and benefits. For example, a company might pay out any unused sick, personal or vacation days as part of the package, or it might continue contributions to an employee’s retirement account. Outplacement services are also often included in severance packages, which can help employees find new jobs.

Temporary workers, such as interns and contractors, are not typically offered severance packages, even if the company decides to terminate their contract or hire them full-time. The reason for this is that severance pay is typically only offered to employees who are being laid off or terminated from their jobs due to factors beyond their control, such as budget cuts, acquisition or a change in corporate strategy.

Can Severance Pay Be Offered For Temporary Employees?

However, some exceptions can be made in certain circumstances. For instance, if an employer wants to keep the employee’s job, they might still offer them a severance package in exchange for signing a release of claims. The same is true for if an employer believes they have legal grounds to fire the employee, such as if the employee stole company property or engaged in some other type of wrongdoing.

Severance pay can also be used to cover taxes. An experienced attorney can help employees understand the tax implications of their severance package and ensure they are filing properly. A severance package may also contain other benefits, such as continued insurance coverage or career consultation services to help a displaced employee find a new job. Some severance packages also include stock options or the option to keep company equipment, such as a phone.

While some companies offer a standard formula for calculating how to get severance pay, it is usually possible to negotiate. This can be especially true for high performers, those in senior positions or those who have worked at the company for a significant length of time. Severance pay can be an excellent way to soften the blow for employees who are being laid off or fired for reasons out of their control. However, it is important to have a clear understanding of what to expect and when to take advantage of a severance package offer. For assistance, reach out to a New York severance package lawyer at Ottinger Employment Lawyers today.