How do I know if my severance package fair?

In assessing the employee’s legal entitlement to notice or payment in lieu, this entails a contextual analysis. There a few considerations that will impact an individual’s severance entitlement.

First, did the employee sign a written contract or letter of offer and if so, what does it say the employee is entitled to receive on termination? The analysis does not stop there as we will want to assess whether the termination clause and whether it actually holds up from a legal perspective. Simply because the employee signed the contract does not mean that the employee’s entitlements are automatically limited to the formula in the contract.

Second, what is the age of the employee? Older employees are generally entitled to a higher amount of severance than their younger counterparts. This is because older employees may encounter a longer job transition period due to a variety of obstacles in their job search, including age discrimination. They may have really long tenure with a specific employer with less diversified experience, and they also tend to have higher rates of pay and benefits -making them more expensive for prospective employers.

Third, what is the employee’s occupation and pay grade? Is this an executive level position, managerial, or low skilled job, or requires specialized expertise? Conversely, is this a job that is generally considered low skilled or otherwise, a job that entails easily transferrable skills sets?

Fourth, what is the employee’s length of service? Longer tenure employees will generally be entitled to a higher severance amount.

These considerations are not an exhaustive list of factors. There may also be other relevant circumstances that may impact the employee’s ability to re-employ, which could play into how much severance the employee is entitled to receive.