Quote:
Originally Posted by CroFlames
You often hear of people getting hefty severance packages when let go. I've never been fired in my life, but it makes me curious.
Based on my brief google search, the minimum for a 10+ year employee is 8 weeks of pay. That seems crazy low for some of the stuff I've heard people get. Usually like a year or more, plus their accrued vacation, pending bonuses, etc.
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I know a lot of people include their pension payouts in that number. I wonder if that's part of it.
The 8 weeks of pay thing is the minimum. There are other companies that do 1-2 months per year worked. So after 2 years. You get 4 months pay, 12 years, it's potentially 1-2 years pay. It's kinda bonkers how much higher than the minimum it can be depending on the situation, but I hear these packages have been getting smaller and smaller over the last 5 years. I've chatted with people who used to calculate these severance pools and many companies revised their policies to be a fraction of what it used to be. I assume it's closer to 1-3 weeks per year now across the board vs 1-2 months per year I've seen people receive before. That's also why some people used to say that if you had the choice of putting your hand up early vs waiting till a few rounds later, it might be better to elect to get laid off earlier. More in the pool for the severance packages vs later. But this really depends on the situations of the companies and a lot has changed in the last 5-10 years.
This calculation is also often based on the last monthly pay slip when you are laid off, not your highest months compensation at the company. That's why you should never ever consider going from full time to part time if you think your employment is in jeopardy. You'd get substantially less on your severance. Going from 100% severance if you got laid off in your current role vs going part time to 0.4 FTE and then getting 60% less severance is a kick in the teeth. Plus the company can't excitedly do it fast enough. You'll basically help them twice in one quarter to meet targets. Imagine working several months part time basically for free and walking away with less overall money from wages and severance than if you had accepted to walk away earlier with a full severance package.
I've even heard of situations where people were furloughed and then tricked into doing some reduced role for a few months which allowed company to offer them a package with a lower amount than those waiting on furlough. But that individual considered it a win. Taking that option meant they were first in line to get what they could. Company was going/went bankrupt anyways. Full severance meant nothing since the company couldn't pay.