Employees typically qualify for severance when they lose their job for reasons beyond their control, such as reductions, company restructuring efforts, or mergers, explains Valerie Keels, the head of D.C. office services at Gavi, the Vaccine Alliance
, and a human resources special expertise panelist at the Society for Human Resource Management
(SHRM). She says that companies with an official severance policy must document it and make the information available to employees.
"Severance is not legislated on a federal level, so more often than not, packages are not offered unless it is on a case-by-case basis," explains Sylvia Francis at The Regional Transportation District in Denver, CO, and a special expertise panelist for SHRM. "Not all companies offer severance packages, and when they do it is often based on position-senior level positions."
Aside from top-level employees, workers who are part of collective bargaining agreements might also have an employee agreement or contract that includes a severance package, adds James M. Paul, co-chair of the American Bar Association
(ABA) Subcommittee on the Family and Medical Leave Act, and a shareholder with the Ogletree Deakins
law firm. Workers who are covered by union contracts might be provided with severance or payment upon termination.
For everyone else outside of these situations, getting paid severance is a much more nebulous issue. "One would obviously not qualify for severance for terminations caused by misconduct, poor performance issues, or other reasons tied to employee behavior," Keels says — but it's important to remember that not many people "qualify" for it at all. Legally, no one
is owed or entitled to severance, and there is no common way of going about it that jilted employees can refer to or rely on.
Mass company layoffs may lead to a package, but if the problem is about an unstable work atmosphere or managerial issues for example, a payout could also be on the table. That's where things can get tricky.