A typical severance package includes severance pay, insurance benefits and the employer's promise not to dispute claims for unemployment benefits, reports Legal Match. In addition, some severance packages may include letters of reference from the employer and outplacement services, such as job training and career counseling.Continue Reading
Severance pay is generally based on the employee's length of service and typical pay, notes Legal Match. Some employers may give a specific amount of severance pay for a specific amount of time worked by the employee. For example, an employee may get 2 weeks of pay for every year worked for the company.
Under COBRA, the Consolidated Omnibus Budget Reconciliation Act, employees can continue their health benefits after leaving a job. However, severance packages often pay the costs of keeping the insurance for a period of time after employment ends.
Depending on the employer, the employee's severance package may also include payment for unused sick or vacation days or reimbursement for business expenses, notes Investopedia. Other items that may be included as part of a severance package include disability or life insurance, and the use of company vehicles, laptops and cell phones, for a particular amount of time. The tradeoff for accepting some severance packages is agreeing not to sue the company for wrongful termination.Learn more about HR