What is the primary reason that firms provide severance pay to employees who are involuntarily terminated?
A) ensuring that current employees remain with the firm
B) preventing terminated employees from suing the firm
C) complying with federal laws that require severance pay
D) expressing concern and support for terminated employees

Question

Quizplus · Accepted Answer

B)A major reason employers offer severance today is that the departing worker must waive all rights to sue the company.Mass layoffs in particular put companies at risk for age discrimination suits because cutbacks often target higher-paid workers,who tend to be older.From the employee's viewpoint,severance is paid so that they will not sue the organization.

What Is the Primary Reason That Firms Provide Severance Pay