Employers are not required to offer severance benefits, but it is common practice among businesses. So why would you want to offer a severance package to a past employee? Well, there a quite a few reasons why it might be a good idea:
- To provide an income continuation to a specific group of employees if they are terminated because of an event beyond their control
- To reassure current and prospective employees that they will have some protection from unanticipated job loss
- To avoid litigation- severance benefits can be offered in exchange for a terminated employee’s release of claims against the employee
- Because it is custom
- To show a sense of loyalty to the employees
- To attract new employees and retain existing employees
If you have any questions regarding severance benefits, please speak to an employment law lawyer.
Image credit: Wikimedia Commons
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