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Severance Pay

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Definitions for: severance pay
severance pay

money paid to an employee who has been laid off by an employer. The money may be paid in the form of a lump sum, as an annuity, or in the form of paychecks for a specified period of time. The size of the termination benefit is based on the length of service and job level of the employee, union contracts, and other factors. Also called termination benefit.

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