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What is the Law Regarding Severance Pay?

July 4, 2022by People First0

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.

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Copyright by People First INC. All rights reserved. 2022

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