Severance pay is often offered to employees across the state of Florida when they are forced to leave a job. Many employees are unclear how to calculate severance pay, though, so it is hard to know if what the employer is offering is fair and appropriate.
Even though there is no Florida law requiring severance pay, if you are being terminated from your job due to furlough, permanent reduction in force, or voluntary layoff, as an employee, you have a right to ask for severance pay.
It is important to have a general understanding of how to calculate severance pay because having to leave a job makes a significant impact on you and your family’s lives. Before determining what you may receive as severance pay, defining what it actually is will help in understanding the calculations.
What is Severance Pay?
Severance pay is pay and benefits an employee receives when they are forced to leave a job. It can be paid either as a lump sum to the employee or through installment payments.
Note: unemployment benefits and severance pay in Florida are not the same. Unemployment benefits can be affected by a severance package you receive from your employer, but if the severance pay is given in a lump sum (all at once), it does not affect the end date when it comes to the time frame for qualification for unemployment insurance. Although there are no severance pay laws in Florida, most employees will be able to apply for unemployment insurance if they are forced to leave their job unrelated to their performance.
Calculating Severance Pay
When you are determining how to calculate severance pay in Florida, there are three areas related to your job that need to be taken into consideration.
1. Payment based on years of service
As a general rule, companies across various industries will calculate severance pay based on years of service as part of an employment separation agreement in Florida. The longer you are with the company prior to dismissal – the longer your weeks of severance pay may be. While there is no standard range, and the range fluctuates greatly from industry to industry, severance is often tied to the length of service . For example, many companies will not consider severance for employees who have not established a long term history with the company. Typical ranges may be as follows:
Less than 1 year = between 2 to 4 weeks of pay
Less than 2 years = between 3 to 8 weeks of pay
Less than 3 years = between 4 to 12 weeks of pay
Less than 4 years = between 5 to 16 weeks of pay
Less than 5 years = between 6 to 20 weeks of pay
Less than 6 years = between 7 to 24 weeks of pay
More than 6 years = between 8 to 28 weeks of pay
Companies that tend to be more “employee-centric” will typically be at the higher end of the scale when it comes to attaching pay to years of service. That being said, it is important to consult with a Florida employment law attorney when negotiating any type of severance package. You may be able to receive more than you think you are entitled to due to the length of employment.
2. Vacation time
Vacation time is another factor that is included in the calculations for the amount of severance pay an employer gives to an employee. If you work for an organization that does provide for paid vacation time, you should ask for any unused vacation time that you have accrued prior to your final day at work.
Some companies will have certain policies, though, when it comes to attaching limits to the number of accrued hours it will pay. For example, it is not uncommon for those in the healthcare industry to accrue a lot of vacation time. A thorough review of employer policies or any previous employment contracts you may have signed should be performed to be clear about what you may be entitled to in terms of accrued benefits. As a general rule, most employers do not pay for unused vacation pay when the separation is voluntary. This may not be the case if you are involuntarily separated.
Vacation time, as a standard, is paid out at regular pay. So, for example, if you make $20 per hour and have 50 hours of vacation time saved up, you should receive $1000 for those hours.
Certain types of employees may be entitled to payment for commissions as part of a Florida severance and release. This is common for employees that specialize in Sales. Commission payouts can be complicated, but if a compensation package is commissioned-based, the standard on how to calculate severance pay is to get an average pay rate for the year and use the chart mentioned in the payment based on years of service to calculate the amount owed to the employee.
As mentioned above, consulting with a Florida employment law attorney in regard to severance pay is advised. Negotiations can be very difficult and often the first offer an employee gets is not necessarily the best one. An employer is looking out for their best interests — and you have the right to look for yours.
Contact a Florida Employment Law Attorney for Help
Having to leave a job makes a huge impact on your financial life, your family life, and your future career. During this difficult time, an employee has the right to be as well-positioned as possible for the future.
At Wenzel Fenton Cabassa, P.A., we have experienced Florida employment law attorneys that help employees receive the compensation they deserve when it comes to severance pay. We work with powerful employers every day — fighting hard for the rights of employees just like you across the state of Florida. Contact us today if you have been notified that you are being terminated due to a layoff, reduction in force, or other types of situations where you may be eligible for severance pay.
When it comes to an employment separation agreement in Florida, you have to make sure you are signing an agreement that is in your best interests, not your employer’s. This includes any stipulations such as a non- compete clause, a confidentiality clause, a non-disparagement provision, or a release of claims against your employer.
Schedule a free, confidential consultation today. We are the employee’s law firm and have helped thousands of employees across Florida get the justice and compensation they deserve.