Are Part-Time Employees Paid Severance?
Severance packages, a form of employment benefit that provides financial support to employees when they are terminated from their employment, are becoming increasingly rare in today's business environment. However, understanding the current landscape and the factors that influence the provision of severance packages is crucial for both employers and employees.
Understanding Severance Packages
Severance packages are typically offered to employees facing redundancy or termination. They often include a sum of money and may also provide continued health insurance coverage for a period, job placement assistance, or other benefits. In the U.S., federal regulations such as the Worker Adjustment and Retraining Notification (WARN) Act mandate severance packages for mass layoffs in companies with over 100 employees.
The Extent of Severance in Small Businesses
It is important to note that the requirement for severance packages is primarily for larger companies with more than 100 employees. For smaller businesses, the situation is different. In the United States, small companies with fewer than 25 employees are generally exempt from the requirement to provide severance packages during mass layoffs. However, the threshold can vary by state.
According to the Bureau of Labor Statistics, approximately 40 million out of 120 million employed individuals in the U.S. work for companies with 99 or fewer employees. This means that almost one-third of the working population is exempt from the requirement to provide severance packages, even under mass layoff conditions. It is noteworthy that recently, the growth in employment in small companies has been more prominent, particularly those with 20 or fewer employees.
Large companies have seen a trend of consolidation and outsourcing since the 1980s, which has led to smaller company sizes and a reduction in the likelihood of providing severance packages across all employee levels. This shift can be seen in the data, where the category of small companies with 50-99 employees has shown the fastest growth, while companies with 20 or fewer employees are currently experiencing the most significant growth.
Personal Experience with Severance Packages
In my experience, of the four small companies I've worked for, none offered severance packages unless legally mandated in the case of a large-scale layoff. Similarly, my friends who have worked for larger companies have generally received severance packages regardless of the reason for their departure. In contrast, the majority of employees I have known who work or have worked for small companies have not received severance packages.
Recently, I retired from a company with 950 employees after 32 years. When the company had only 49 or fewer employees upon my start, it was a classic small business. Despite this long tenure, I received no severance package and only a “best wishes for a great life in retirement” message from my coworkers. This is entirely legal, as companies do not have to provide severance packages, and they often don't.
My boss did offer me a generous $250 gift card, which I sincerely appreciate, as he did not have an obligation to do so. Additionally, the company provided me with a retiree plaque, which likely cost a small amount to produce.
Severance Packages for Part-Time Employees
Given that full-time staff are rarely offered severance packages, it is reasonable to assume that it is even less likely for part-time employees to receive severance. However, some online resources suggest that you can negotiate for a severance package, which is certainly worth trying.
It is crucial to consider the potential impact of setting a precedent. If you are offered a severance package, you might consider agreeing to not disclose any details about the terms of your departure. This can provide the company with some assurance that they might not have to offer severance packages to all their employees in the future.
Conclusion
Severance packages are a complex issue influenced by the size of the company, the industry, and broader economic trends. Understanding these factors and the current legal landscape is essential for both employers and employees as they navigate the evolving job market. Whether you are a full-time or part-time employee, taking steps to negotiate for a severance package, where feasible, can provide additional financial support during a potentially challenging transition.