Financial Survival: Severance Pay and Employee Notice

A recent NY Times article about Gannett cutting severence pay was alarming.  A major newspaper company I’ve never heard of had a generous severance package (1 week per year of employment) during previous layoffs, and now they’re changing to a state-funded unemployment.  In most cases, people faired just as well or better, but researchers were quick to find the handful of people that were getting “screwed”.  These included people in real trouble, who didn’t qualify for state unemployment because of part-time side gigs they have.  It also included people who found another job quickly, but were miffed that they only got 1 week of unemployment pay instead of the 10 weeks of severance pay they would have gotten under the old policy.

Here’s what I think is fair.  Companies should be able to make whatever severance packages they want, but it should work both ways.  If a company offers 2 week severance to all employees, then they have every right to require two weeks notice when an employee quits.  When I say require, I mean any shortfall should be taken out of the final paycheck.  Companies are usually in a better position to make good, so I’d say if a company wants to offer *additional* severance, go ahead.  But they should be able to require up to an equal commitment from their employees.

If this seems unfair, remember that this is legally the case right now.  Companies are not legally required to give you a dime when you’re let go, and you’re not legally required to give any notice when you quit.  It comes down to accountability.  We need to be able to financially support ourselves during times of unemployment.  We shouldn’t expect to go our whole lives gainfully employed with no breaks.

I’m almost just as guilty as most – I don’t have enough saved up yet to be unemployed for 6 months, which I feel is a realistic number in this economy.  I’m not quite as guilty though, because I can at least see my own responsibility and I’m working to fix it.  I probably have a more enlightened take on this, because I’m a freelancer.  I’m used to occasional work gaps, and I’ve had to weather tough times.  I have much more personal responsibility for my income than most people, and that’s how I like it.

The real lesson of this article, even though they choose not to say it explicitly, is that we each need to be responsible for providing for ourselves.  That’s capitalism – we reap the rewards every day, and we need to take the responsibility as well.  Companies don’t owe us anything for working for them, other than the compensation we’ve been getting all along.  If you work for a company each pay cycle, and they pay you according to your agreed arrangement, then your obligation to each other is fulfilled.  Anything above that is gravy, and you should be prepared to go without it.

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