If you’re like most bosses, you hate saying the words, “You’re fired!”
Then again, you probably don’t want to utter the words, “Here’s a severance check.”
That’s understandable. If the person on the other side of the desk was an outstanding employee, you probably wouldn’t be firing them, let alone handing them a check. On the other hand, you have a heart.
The moments between “You’re fired” and “Goodbye, I wish you the best of luck,” are always uncomfortable — for both parties.
Severance pay obviously is a touchy subject. The ex-employee may expect it, not knowing you aren’t obligated to pay them another dime. At least that’s the reality in Florida.
In most cases, you’re not obligated to pay severance. But you may want to. The question then becomes, “How much is appropriate?”
That’s your call. Some companies will pay terminated employees two weeks of their regular pay, according to the Florida Small Business website. Some governmental agencies offer severance pay equaling two years worth of base salary.
In some instances, rather than pay money, companies will extend health benefits for a certain length of time or until the employee secures a new job.
With that said, there are instances when terminated employees legally are entitled to severance pay:
• When an employment contract stipulates severance;
• When company policy states that employees are entitled to it;
• When a company conducts a massive layoff without giving 60 days notice. This stems from a federal law known as the Worker Awareness and Retraining Notification (WARN) Act, which requires large employers to pay severance when large layoffs are made without 60 days advance notice.
Providing severance pay to a departing employee is a kindness, but it’s also a legal necessity in this era of lawsuits. In some cases, severance should be paid to reduce risk. In some cases, it makes sense to pay some amount of severance in exchange for a release if there is risk of a claim.
Regardless of your motivation, providing severance pay is a positive and supportive gesture. And the biggest benefit may be a “sort of goodwill” you create among the employees saying farewell to a co-worker. Paying severance will be positively viewed by the remaining employees who judge you by actions. Yes, you know they are watching.