Size ESigning Severance Agreement Template For Free

Dear [Employee Name], I regret to inform you that your employment with [Company Name] is terminated effective [date]. Four weeks of severance pay is being offered in exchange for signing the attached release of claims and returning the signed release to human resources no later than [date].

The calculation behind the financial compensation offered in severance agreements varies from stingy to generous. Favorable severance agreements offer one month's worth of salary for every year of tenure with the company; while more frugal packages provide just one week's worth of salary for each year, experts said.

Write the terms of the severance package in a formal list that you will present to the employee at the termination meeting. Include a line at the end of the document for the employee's signature agreeing to the terms.

Generally, you'll get one week to four weeks of pay per year of service, but it is common for employers to pay out two weeks of pay for each year at the company. Of course, every company differs in calculating total severance pay.

A severance agreement should include the following elements: The name of the employer and employee. The effective date of the agreement. The employment period of the outgoing employee. The severance pay amount. Terms of continuation of benefits. Employee waiver of legal claims (within reason)

Severance pay best practices. If an employer decides to put a severance agreement policy in place, they must put the agreement in writing, make sure it's legally compliant, provide time for the employee to review it, follow through on its commitments, and remain consistent with all employees in the same situation.

Providing one-to-two weeks of pay per year of service is a standard practice, with management and above typically receiving four weeks or more and executives receiving anywhere from three to 24 months of severance pay.