What would be the best compensation package for the laid off employees?

What would be the best compensation package for the laid off employees?

The general practice is to try to get four weeks of severance pay for each year worked. Middle managers and executives usually receive a higher amount. Some executives, for example, may receive pay for more than a year.

Is severance pay taxed at a different rate?

Severance pay is taxed by the IRS the same as wages—you’ll have to pay employment (FICA) tax and income tax withholding at your usual rate. The same goes for other taxable income on your final paycheck, including unused vacation time, commissions, bonuses, etc.

What happens when you get laid off from a company?

“Some companies offer severance as a matter of company policy,” says Davis, “but it is discretionary.” In larger companies, severance plans may be based on a set, standard formula, says Siegel. “Generally, you’ll see offers of one to four weeks of pay per year of service, and it’s capped at a certain number of weeks,” he adds.

Where to look for compensation after a layoff?

The first place to look for compensation is money you have already earned. For example, you are entitled to receive your final paycheck, compensating you for all of your hours worked, in fairly short order after a layoff. (For state-by-state information, see Nolo’s Chart: Final Paychecks for Departing Employees .)

What should be included in a layoff package?

Additional ideas include allowing use of certain company resources (such as printing, copying and mailing) for a predetermined length of time and referring employees to an outside placement agency.

How to evaluate the compensation package and job offer?

If the proposed salary is not what you expected, examine the benefits and perks. A top-notch package may make a lower salary more palatable. Or if the perks aren’t what you were expecting, you may be able to negotiate certain items .

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