Service Sets Severance Standard

December 13, 2001 (PLANSPONSOR.com) - 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.
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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.


 

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