Reorganizations, downsizing, and severance.....oh, my

Jez

Hi - my organization is in the not-so-unique situation of reorganizing for financial reasons. I'm in the process of working out a severance policy and it would be tremendously beneficial to find out what my HR colleagues are doing. I'm hoping to get some feedback on a few things: 1)how much severance do you offer? i.e. one week for each year of service? 2 weeks? 2)In which situations are severance packages offered? I.E. a position is eliminated = severance, but what if a few positions are consolidated into one and 3 people have to apply? What if someone chooses not to apply? Should they be entitled to severance? What about a situation in which a position is completely changed, the current incumbent is offered the new opportunity and declines? Severance? Thanks in advance for your input.

Margaret Morford

We did one week for every year of service up to 12 weeks. Then we went up in three year increments. We had a two week minimum.

If you are combining jobs, have two people interested and have one person not apply, I'd probably not want a person that not interested in staying. On the other hand, if we had work for someone and he/she refused it, no severance. You have a job for him/her. He/she will probably not get unemployment either since he/she turned down work.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

njjel

I am in NJ and we offer generous severance packages to any person who is let go due to downsizing. In fact, we even gave severance to one controller who was incapable of doing the job after only 3 months of hire! But in general I agree with Margaret's post.

ritaanz

In the circumstance where the employee's position is being eliminated AND the employee does not refuse or otherwise fail to accept another position which may be available within the company, a severance package is granted. Exempt employees are entitled to one week's pay for each full year of continuous service to a maximum of 13 weeks. Non-exmept employees are entitled to one week's pay for each full year of continuous service to a maximum of 8 weeks.

Hope this helps.