A severance pay package includes the compensation and other benefits that an employee receives when they leave the employment of a company for nearly any reason. Severance pay usually includes between one and two weeks of pay for every year an employee served the company.
Severance pay packages primarily involve monetary compensation, but sometimes also include benefits such as health insurance and assistance with obtaining other employment. Executives often receive a greater amount of compensation for severance pay, and the terms for their severance are usually established in the original employment contract. Severance pay is not required by federal law, so it is up for discussion by individual employers and employees.