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Benefits December 13, 2001
Service Sets Severance Standard
December 13, 2001 (PLANSPONSOR.com) - Most US and
Canadian companies offer laid-off employees severance pay
based on their length of service, a Towers Perrin study
found.
Reported by Fred Schneyer
The study of more than 100 firms found that more than 90% offer severance with 86% of those giving a median minimum of two weeks’ salary.
Other study findings included:
- Median weeks of severance for managers below the top averages four weeks after one year service.
- Technical and professional employees receive three weeks’ salary, and other salaried employees receive two weeks’ pay.
Typically, the maximum severance protection period for
salary payments is 52 weeks.
.
Also, in exchange for the severance, roughly half of the
companies required that some former employees, most
typically executives, agree to non-compete provisions.
These provisions typically are effective for one to two
years.