There are no laws that require employers to pay severance pay when an employee is terminated. However, it is critical that if an employer does have a severance policy, it should be documented. If a policy exists, it should be administered uniformly.
If not administered uniformly, the employer could be liable for discrimination. For example, you pay severance to a 35 year-old male who worked in your accounting department as the accounts payable clerk. You then terminate a 45 year-old female who worked as the accounts receivable clerk but do not pay her severance. The female could file a discrimination claim against the employer.
If you would like to learn more about this and other HR matters, reach out to a Human Resource Professional.
