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How do severance packages work?

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  • Jul 20th, 2020 11:55 am
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[OP]
Deal Fanatic
Feb 4, 2010
6698 posts
6284 upvotes
Sum_guy wrote: I've only been offered a lump sum once, usually most larger firms do continuation. Because I need benefits coverage id oot for continuance.

I've negotiated payout of options, I was cut a month before they vested but they just dated them forward.

Because I've worked in an industry where it's routine to be laid off I would hesitate to get too aggressive a lawyer unless there was something shady or inappropriate. It's quite likely I'll end up working for one of the companies I left in the future and it's a really small world.
Thanks for sharing. Sounds stressful but I'm guessing for you it's the norm?
Deal Addict
Jan 1, 2017
1817 posts
1859 upvotes
hierophant wrote: Why make assumptions instead of answering the question? Did you even see that I said e.g.

As for proving - the tone of your message almost suggests such thing doesn't happen, but at any rate each organization has its own process, if not you can file a complaint with the Ministry of Labour or Human Rights tribunal depending on situation.
I don’t think there is a standard compensation package if you were discriminated against. Each case will have to reviewed by lawyers and courts to determine what is appropriate.

If you were laid off as in any lay-off on average a month per year worked is considered a good compensation.
Deal Addict
Mar 10, 2011
2513 posts
698 upvotes
Toronto
Be careful with lump sum as it could push you into a much higher tax bracket and you could end up paying a lot of money to the government. Will the company allow the LS payment to be spread over more than one year?
An extreme situation is that you for example make 90k per year, you are let go in late November, made 85k in salary so far for the year and then are paid a 90k lump sum on Dec 1. So in that case you have to declare 175k income for the year which will push some of your income into 43% and the 48% tax bracket. If you can spread the lump sum over more than one year, you avoid the problem.
Deal Addict
Apr 7, 2011
2052 posts
609 upvotes
Hamilton
hierophant wrote: Thanks for sharing. Sounds stressful but I'm guessing for you it's the norm?
It's always stressful but you can't let it big you down. I always joke that one place laid me off three times before I finally quit.
Deal Fanatic
User avatar
Jan 31, 2006
8029 posts
2357 upvotes
Toronto
Biff88 wrote: Be careful with lump sum as it could push you into a much higher tax bracket and you could end up paying a lot of money to the government. Will the company allow the LS payment to be spread over more than one year?
An extreme situation is that you for example make 90k per year, you are let go in late November, made 85k in salary so far for the year and then are paid a 90k lump sum on Dec 1. So in that case you have to declare 175k income for the year which will push some of your income into 43% and the 48% tax bracket. If you can spread the lump sum over more than one year, you avoid the problem.
What if the company will just give you a lump sum. What will you do next?
Newbie
Aug 10, 2018
72 posts
39 upvotes
alanbrenton wrote: Hasn't that been the case for ages? I always recall the minimum is one week for each year of service.
I might be mistaken, but I think in the past(few years ago) it was 2 weeks.
Deal Expert
User avatar
Apr 21, 2004
56484 posts
21536 upvotes
Dzik99 wrote: I might be mistaken, but I think in the past(few years ago) it was 2 weeks.
It was always 1 week in the back of my head and I though it was a joke of an employment standard. I could be wrong though.
Newbie
Aug 10, 2018
72 posts
39 upvotes
alanbrenton wrote: It was always 1 week in the back of my head and I though it was a joke of an employment standard. I could be wrong though.
You're right. I've searched it. And it was 1 week for years. My mistake, somehow 2 weeks were in the back of my head...

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