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Severance
(redirected from Severance Payments)

   Also found in: Dictionary/thesaurus, Legal, Wikipedia 0.01 sec.
Severance
A settlement received after being released from a corporation. In the context of corporate governance, an agreement that assures high-level executives of their postions or some compensation and are not contingent upon a change in control.

Severance
A payment often (but not always) made in a lump sum that occurs when an employee is laid off or fired. Severance is sometime voluntary; that is, an employee may choose to quit and take a severance that is offered instead of staying and risking a layoff with no severance. The amount of severance is determined by the employee's length of time at the company, previous pay rate, and other factors. Accepting a severance makes one ineligible to collect unemployment insurance or to initiate a wrongful termination lawsuit. A severance exists in order to reduce the risk of the company when layoffs become necessary and to improve employee morale.


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The former Chief Secretary to the Treasury was one of five Treasury ministers who received a total of pounds 64,766 in severance payments.
District Court for the Western District of Michigan surprised many legal experts when it affirmed an earlier bankruptcy court ruling and held that severance payments were not wages subject to Social Security and Medicare taxes (i.
There has been considerable confusion as to whether severance payments are subject to FICA taxes because of a Michigan Federal District Court's recent decision in In Re Quality Stores, Inc.
 
 
 
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