Payments made to employees upon termination, typically beyond what is legally required.
Severance pay is voluntary in most situations (the WARN Act may require limited pay in mass layoff scenarios). It's often offered in exchange for a release of claims — formalized in a Separation Agreement and General Release.
PEO HR advisors typically help design severance and release packages to balance fairness, retention of trade secrets, and waiver of potential claims.
Payments made to employees upon termination, typically beyond what is legally required.
Severance pay is voluntary in most situations (the WARN Act may require limited pay in mass layoff scenarios).
Most PEO buying decisions touch several related concepts at once. Severance pay typically comes up alongside the other terms in this category. Closely related terms include Wrongful termination, WARN Act.
This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.
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