severance pay

noun

Definition of severance pay

: an allowance usually based on length of service that is payable to an employee on termination of employment

Examples of severance pay in a Sentence

Recent Examples on the Web

In June, the council reduced his severance pay to nine months in the event Orozco was terminated. — Lex Talamo, The Seattle Times, "‘Out of office for good,’ AG Bob Ferguson says of Wapato administrator who resigned under pressure," 20 July 2019 For instance, agreements can help ensure that workers who lose their jobs get severance pay. — Bloomberg News, The Mercury News, "Buzzfeed workers walk out to force union recognition," 17 June 2019 At Vox Media, home of websites like the Verge and Eater, a new union contract ensures that employees get a minimum of 11 weeks of severance pay if they get laid off. — Gerry Smith, BostonGlobe.com, "Journalism jobs cut at highest rate since 2009," 1 July 2019 The severance pay was double Calhoun’s annual salary. — Chicago Tribune Staff, chicagotribune.com, "13 costly personnel changes at Illinois public colleges," 1 July 2019 Core employees unable to secure positions within the ongoing 60-day transition period will be offered severance pay and other benefits, Walker said. — Ron Hurtibise, sun-sentinel.com, "Holy Cross to close Boca and West Boca urgent care centers," 20 June 2019 The contract does not provide for severance pay if Hyatt is terminated for cause or resigns. — Alison Knezevich, baltimoresun.com, "Melissa Hyatt confirmed unanimously as Baltimore County police chief; she's first woman to lead the department," 4 June 2019 Anyone who’s likely to rely on lifelong series of transactions with the government in the form of benefits, pensions, severance pay, etc., ends up paying a higher penalty for not voting. — Chayenne Polimedio, Vox, "Is voting a civic right or a civic duty?," 6 Nov. 2018 The staff was let go without any notice or severance pay. — Juliana Feliciano Reyes, Philly.com, "Feminist Apparel CEO Alan Martofel called out for past behavior says: 'Is feminism an inclusive movement or not?'," 12 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'severance pay.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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More Definitions for severance pay

severance pay

noun

Financial Definition of severance pay

What It Is

Severance pay refers to a payment from a company to an employee who is being discharged.

How It Works

Under certain circumstances, employers compensate an employee who is being discharged with a sum of money called severance pay. The specific amount may be related to the employee's salary and length of time with the company. In most cases, severance pay is paid to an employee who is being laid off due to internal changes within a company.

To illustrate, suppose Bob is one of two internal accountants for company XYZ. Due to restructuring, XYZ now needs only one accountant, and Bob's position is subsequently eliminated. Bob is laid off, as a result, and is given severance pay by XYZ when he leaves.

Why It Matters

In many cases, employees are made to leave a given company due to internal changes that eliminate their jobs. Severance pay is a compensatory measure that ensures that laid-off employees are compensated fairly not only for work done since their last pay cycle, but also for covering any expenses that may be incurred through no fault of their own between the time they leave their current job and find another position.

Source: Investing Answers

severance pay

Definition of severance pay

Examples of severance pay in a Sentence

First Known Use of severance pay

Financial Definition of severance pay

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