What is the term used for the compensation intended to support an employee after a job loss?

What is the term used for the compensation intended to support an employee after a job loss?

• A. Termination pay
• B. Severance pay
• C. Notice pay
• D. Retirement pay

Answer: (B)

Severance pay is the compensation intended to support an employee after a job loss. It’s the amount provided when employment ends due to the employer’s decision (often for restructuring or other non-fault reasons) and is meant to help the employee transition while looking for new work. The amount and terms are usually set by contract, policy, or statutory rules and often depend on factors like length of service. This is distinct from notice pay, which is money given specifically for the notice period, and from retirement or termination pay, which refer to other, less related situations.

Severance pay is the compensation intended to support an employee after a job loss. It’s the amount provided when employment ends due to the employer’s decision (often for restructuring or other non-fault reasons) and is meant to help the employee transition while looking for new work. The amount and terms are usually set by contract, policy, or statutory rules and often depend on factors like length of service. This is distinct from notice pay, which is money given specifically for the notice period, and from retirement or termination pay, which refer to other, less related situations.