severance
SEV-uh-runs
/ˈsɛvərəns/
Money or benefits paid to an employee upon termination of employment.
Often includes pay, health benefits, and other perks for a period after employment ends, especially in cases of layoff or mutual agreement.
The story behind the word. "Severance" comes from the Old French word sevrer, meaning "to separate, to cut off." It entered English in the 15th century, initially meaning "separation" or "division." Its specific application to payments made upon the termination of employment became common in the 20th century, reflecting the idea of "severing" ties with an employer.
Word relationships
- compensation: Broader term, can refer to any payment for work or loss.
- golden parachute: Informal term for very generous severance packages for top executives.
- salary: Regular payment for work performed.
- wages: Hourly or weekly payment for work performed.
Commonly confused with
- salary: 'Severance' is a one-time or short-term payment after employment ends; 'salary' is ongoing payment during employment.
Word family
- sever (verb): To cut off or separate.
Collocations
- severance package
- severance pay
- receive severance
- negotiate severance
Example sentences
- "As part of his severance package, the executive received six months' salary and continued health insurance coverage." Part of a termination package.
- "Employees are often entitled to severance pay based on their years of service." Legal entitlement.
Memory hook
Severance is the money you get when your ties with the company are severed. Severed ties, money.
When not to use
Don't use for regular salary or wages; it specifically refers to payments made after employment ends due to its termination.
Fun facts
- The amount of severance pay can vary greatly depending on the company's policy, the employee's contract, and local labor laws.
Related words
Also appears in
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