Service Sets Severance Standard

December 13, 2001 ( - Most US and Canadian companies offer laid-off employees severance pay based on their length of service, a Towers Perrin study found.

The study of more than 100 firms found that more than 90% offer severance with 86% of those giving a median minimum of two weeks’ salary.

Other study findings included:

  • Median weeks of severance for managers below the top averages four weeks after one year service.
  • Technical and professional employees receive three weeks’ salary, and other salaried employees receive two weeks’ pay.

Typically, the maximum severance protection period for salary payments is 52 weeks.
Also, in exchange for the severance, roughly half of the companies required that some former employees, most typically executives, agree to non-compete provisions. These provisions typically are effective for one to two years.