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Indiana Employee Severance Pay: How Much Should A Company Offer?
December 08, 2008

            The current economy is causing Indiana employers to layoff employees in unprecedented numbers. As an Indiana employment lawyer who represents employees, my law firm is contacted regularly with questions about severance pay and accompanying release agreements. There is no requirement in Indiana that an employer offer severance pay to a departing employee. Nonetheless, many employers seek to avoid legal action and offer severance in exchange for a full release of claims.

            Recently, a consulting firm called Right Management released the results of a study that compared severance pay in the United States with that offered by employers in other countries. Perhaps of more interest to the Indiana workforce is the breakdown of severance pay per year of service for different sectors of employment. The results are as follows:
Voluntarily Separated:
 
Top Executives                                   2.76 weeks
Senior Executives                               2.23 weeks
Department Heads/Managers             1.55 weeks
Professional/Technical                        1.39 weeks
All other employees                            1.23 weeks
 
Involuntarily Separated:
 
Top Executives                                  3.04 weeks
Senior Executives                               2.49 weeks
Department Heads/Managers             1.78 weeks
Professional/Technical                        1.60 weeks
All other employees                            1.44 weeks
 
             If you are offered a severance package, it makes sense to speak with an Indiana employment attorney before signing the document. Because most severance packages include a release of claims, you may be waiving legal rights that are more valuable than the severance offered. In addition, many employers include non-competition clauses, as well as other clauses that impact your legal rights and ability to work elsewhere after you leave the company. Finally, under certain circumstances, additional severance money can be obtained. The law firm of Gibbons Jones, P.C. regularly reviews severance agreements and provides legal advice to employees who have been separated from their employers.


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