I’ve heard interviews where 1 - 2 year severance packages are being considered for laid off federal employees. The vast majority of Americans do not receive severance when their employers fail to operate profitably. Therefore, large severance packages are not a good use of American taxes. A overly generous severance will incentivize continued unemployment, too. Please consider the following policy instead.
Outplacement / Severance Pay Policy
Purpose: This policy outlines the outplacement / severance benefits provided to employees upon termination of their employment with the Federal Government, under circumstances not involving gross misconduct or poor performance. The aim is to provide financial support during the transition period and encourage re-employment.
Eligibility:
- Service Requirement: Employees must have completed a minimum of five (5) years of continuous fulltime service with the Federal Government to be eligible for severance benefits.
Severance Pay Calculation:
- Base Amount: Eligible employees will receive severance pay calculated at the rate of one (1) week of pay for each year of service with the government.
- Example: An employee with 15 years of service would receive 15 weeks of severance.
Payment Structure:
- Monthly Payments:
- 50% to 75% of the total severance amount will be paid out in monthly installments, depending on the employee’s tenure:
- 50% for employees with 5-10 years of service.
- 75% for employees with over 10 years of service.
- 50% to 75% of the total severance amount will be paid out in monthly installments, depending on the employee’s tenure:
- Lump Sum Payment:
- The remaining balance of the severance pay will be paid in full upon the employee securing new employment or at the end of the severance term, whichever comes first.
Outplacement Services:
- The Federal Government will provide access to outplacement services for a period of six months from the date of separation. These services include:
- Career counseling
- Resume writing assistance
- Interview coaching
- Job search strategies
- Transfer job placement coordination to other Federal, State or Local government positions
- Skills improvement / apprenticeship opportunities
COBRA Continuation:
- Eligible employees will receive information regarding the continuation of their group health coverage under COBRA. This notice will detail:
- Medical insurance
- Dental insurance
- Vision insurance
- Enrollment procedures and deadlines
Motivation for Re-Employment:
- The severance package is structured to assist employees during their transition to new employment without creating financial incentives for prolonged unemployment. The monthly payment schedule encourages active job seeking while providing temporary financial support.
Additional Notes:
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Average Severance Pay: According to recent data, while severance packages can vary widely, a common benchmark is one to two weeks of pay per year of service. However, it’s noted that a significant majority of laid-off employees do not receive any severance, highlighting the value of this benefit at the Federal Government.
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Non-Discrimination: This policy applies equally to all employees regardless of position, with adjustments made based on tenure for fairness.
Termination Conditions:
- Severance benefits are not offered in cases of:
- Voluntary resignation without notice.
- Termination for cause or gross misconduct.
- Retirement.
Amendments:
- The Federal Government reserves the right to amend or terminate this severance policy at any time, with or without notice, subject to applicable laws.
Contact Information: For further details on this policy or to discuss individual cases, employees should contact the {outplacment service name}.
This policy aims to balance the needs of both the government and the employees by providing fair compensation while encouraging prompt re-employment.