Sticky Situation: Severance Pay

When do you offer a departed employee severance pay?



The Situation: Sometimes you have to let employees go for economic reasons or other reasons that don’t constitute as firing. In these cases, do you give the employee severance pay?

The Solution: “I have let people go because of economic conditions and gave them severance,” says Bruce Schoenberg, president of Oasis Day Spas in New York City and Westchester, N.Y. Adds Summer Langhorne, general manager of milk + honey in Austin, Texas, “We had a high-ranking member of the team just not working out. It wasn’t a termination situation. In this case, we gave him severance, but we don’t do that happen often.”

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