PA companies offering severance to employees should read this…

Starting this year, employees who receive severance pay in excess of 40% of the average annual wage in Pennsylvania will have their unemployment compensation benefits offset. Currently, that 40% number is $17,853.00.

As Jonathan Segal, Legislative Director for PA State Council of SHRM, notes here, employers should be very careful not to represent anything in a severance agreement that an employee could reasonably construe as suggesting that this change in the law will not apply. He adds here that employers should also consider beefing up their severance-agreement-release language to confirm that the release is effective even if severance is offset or reduced under PA law.

You can read more on the change in the law here.

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