Severance

(redirected from Severance Pays)
Also found in: Dictionary, Thesaurus, Legal.

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.
References in periodicals archive ?
The taE-eron pool in Turkey comprises a weak segment of the labor force that does not benefit from the support of unions, and companies maximize profits by paying temporary laborers low wages and by being able to evade paying overtime and severance pay and providing health insurance.