Severance package in case of layoffs

Severance pay a benefit given to employees under a certain set of circumstances upon leaving a company. Circumstances for giving severance pay vary by company, but organizations typically award it to employees who no longer have a job due to layoffs or downsizing.

It is frequently required by employment law, but employers may also voluntarily give severance pay even when not required by law to do so.

The total amount is calculated as follows:

• After three (3) months – One week.
• After 12 months – Two weeks.
• After Three (3) years – One week for each completed year

The labour commissioner’s office recommends companies consider Voluntary Separation Policy (VSP) that allows employees to resign voluntarily and get VSP benefits. These benefits include 22 weeks base pay, a one-week base salary for every six months of their service, a severance payment of up to 20 weeks, and continued medical insurance coverage for six months as per policy or equivalent insurance premium amount.