Two-weeks Severance Pay Prevalent

October 4, 2001 ( - Laid off workers, the casualties of a faltering economy, are likely to receive a minimum of two weeks salary in severance pay, with more senior and longer-tenured employees receiving larger packages, a new survey finds.

Result of the study by Lee Hecht Harrison show that 79% of organizations have severance policies, for which all full-time employees at all levels are generally eligible.

Two-thirds of those companies set minimum severance payouts, with:

  • two weeks pay the median for non-exempt  employees
  • three weeks for exempts, such as managers, other salaried staff
  • four weeks for executives, senior executives, and officers.


The research also shows that beyond the minimums, severance tends to be based on a formula including years of service, although the higher the employee’s level, the more likely severance will be negotiated or specified in an employment agreement.

When severance is based on years of service only, one week salary per year of service is typical for exempt and non-exempt employees. Two weeks per year of service is the median given to officers, senior executives, and executives, according to the survey.

Capping Payouts

Three out of five organizations put a maximum on severance payouts, with 26 weeks salary being the median cap at all levels except officers, who get 36 weeks salary.

In terms of outplacement, most organizations provide it to at least some employees, regardless of level.

Results were based on responses from human resources executives at 925 US companies.