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How much is severance pay?
Severance pay is calculated using several factors, such as an employee’s age, position and length of service, as well as an employee’s ability to secure similar employment. Any bonus, benefits and commission should also be included in the package, which can be as much as 24 months’ pay. My firm developed a severance pay calculator that can give you a quick and anonymous understanding of how much you might be owed.
READ MORE: The 5 facts you need to know about severance pay, according to an employment lawyer
Do I have to accept a severance offer by my employer’s deadline?
Your employer may present you with a severance package and ask you to sign it on the spot. But you don’t have to accept a severance offer before the deadline set by your employer. Legally, you have two years from the moment you’re let go to obtain compensation.
Your rights include having a severance package reviewed by an employment lawyer at my firm to ensure that your entitlements are satisfied. Severance package deadlines are often used as a pressure tactic to get an employee to agree to an amount that is less than what they are entitled to through our legal system.
Can I get severance if the company goes bankrupt?
If the company goes into bankruptcy or receivership, it is extremely unlikely that you will be able to get severance pay. One health care aide provider in 2017 sought creditor protection and that meant that its its 1400 former employees were placed at the back of the line for compensation, behind secured creditors like the government and banks.
People who were owed as much as $100,000 in severance would instead receive nothing. If your employer owes you unpaid wages or vacation pay at the time of bankruptcy, federal agencies may be able to help you secure those funds. You should also speak to an employment lawyer about making a claim for unpaid wages, as the directors of a company may very well be liable for such payments.