Severance Pay Legal Meaning and Definition

Here is a simplified definition of the legal term Severance Pay.

Severance Pay (noun): This refers to the compensation that an employee receives upon termination of their employment by the employer. It is generally provided based on the length of the person's employment and is usually given after layoffs, job elimination, or mutual agreement to part ways. It's important to note that it is not a legal requirement in every country, but certain businesses choose to offer it. The purpose of severance pay is to aid the employee while they search for a new job.