Program Option Three

Implement New Employment Feature

The third option reduces or stops severance payments when a terminated employee finds new employment. For example, if a terminated worker is eligible to receive 20 weeks of severance but begins new employment after only 16 weeks, the employer can stop payments, having provided adequate severance to bridge the employee to the next job. This option allows companies to achieve one of the primary goals of severance programs–to provide income replacement during the period of unemployment–without overpaying to do so. By adopting the new employment option, companies could save an estimated 20 percent of current severance expenses–which could be used to fund other programs that support terminated employees who are not as well positioned with respect to finding new employment.