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This question is about employer.
Can an employer stop severance pay?
Yes, an employer can stop severance pay. There are circumstances by which an employer can alter or even cancel severance pay to an employee.
A severance agreement is typically entered into by both employer and employee and awarded to a terminated employee in exchange for releasing any claims that said employee may have against the company. Without an agreement or contract, stating the amount of money and conditions of severance, employers may reduce or eliminate future severance compensation.
Contracts governing severance packages are either part of a company policy introduced during the hiring process or established later by an individual employee or union negotiator. Under any of these circumstances, employers are not legally allowed to alter or stop severance payments. Individuals that enter into severance contracts have seven days to rescind a severance offer.
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