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Employee Severance Pay

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					                                 University of Alabama at Birmingham

        SEVERANCE PAY AND BENEFITS POLICY FOR NONFACULTY EMPLOYEES

                                            January 12, 2009

                                (Replaces policy dated September 15, 2000)


                                             Policy Statement

UAB’s severance program is designed to provide financial support for full-time and part-time regular
employees (employment categories 01,03,12) during a period of employment transition. UAB provides
severance pay and benefits for full-time and part-time regular nonfaculty exempt (monthly paid)
employees below the level of vice presidential/Provost/CEO of the UAB Health System, and non-exempt
(biweekly paid) employees who are terminated involuntarily for the following reasons: loss of position
due to institutional restructuring, loss or lack of funding or workforce downsizing approved by the
Provost or the appropriate vice president. Employees terminated for any reason other than those listed
above or who resign are not eligible for pay and benefits under this policy. Likewise, non-faculty
employees whose employment with UAB ends upon completion of the pre-determined end date of a grant
or contract will not receive severance pay.

Affected employees will be given as much advance notice as possible of the impending job loss in addition to
the severance payout described in this policy.

When possible, at least one week prior to the separation date, employees will be notified in writing of the
reduction and applicable dates of the severance period, including timeframes of the working notice and
severance pay periods. The notice will include the last day worked and the effective termination date, which
will be the date the severance period ends. The decision to allow an employee to continue working may be
rescinded by the department at any time during the notice period. The displaced employee will be given
reasonable time to pursue other job opportunities during the notice period.

The amount of severance pay depends on number of years of service and whether the position is biweekly
paid (non-exempt) or monthly paid (exempt). The date used to calculate total severance benefits is the
employee’s most recent service date. Severance pay is based exclusively on base pay provided by UAB.
The allowed severance pay rates are as follows:

    1. Biweekly paid (non-exempt) employees are eligible for severance pay according to the following
       schedule:
               Less than 5 years service                                                  2 weeks pay
               5 years but less than 10 years                                             4 weeks pay
               10 years but less than 20 years                                            8 weeks pay
               20 years or more service                                                 12 weeks pay

    2. Monthly paid (exempt) employees are eligible for severance pay according to the following
       schedule:
               Less than 5 years service                                             1 month pay
               5 years but less than 10 years                                       2 months pay
               10 years but less than 20 years                                      3 months pay
               20 years or more service                                             4 months pay
SEVERANCE PAY AND BENEFITS POLICY FOR NONFACULTY EMPLOYEES
January 12, 2009
Page 2


At the election of the employee, severance pay may be distributed as a one-time payment of the full
severance amount or through normal payroll processing using the same rate of payment as before the
employee was terminated. Severance pay distributed as a one-time payment of the full severance pay amount
is not subject to Teachers’ Retirement System of Alabama deductions, state income tax nor to TIAA-CREF
deductions, but is subject to withholdings for federal tax, Social Security (FICA), city occupational tax and
county occupational tax.

If the severance pay is distributed through normal payroll processing, the following shall apply:

    1. A displaced employee is eligible to continue participation in group benefit plans as previously
       elected prior to the qualifying event. Participation will be at the same level, premium rate, or amount
       as for active employees.

    2. Vacation and sick time will continue to accrue.

    3. The displaced employee is eligible to continue participating in defined contribution-based and
       defined benefit plans such as the Teachers' Retirement System of Alabama and TIAA-CREF. For
       purposes of crediting time in the retirement system, the Teachers' Retirement System of Alabama
       treats severance periods the same as paid sabbaticals and other paid leaves of absence (that is, the
       time is credited toward retirement).

The severance pay will cease and the additional distributions will be forfeited permanently on the date the
individual secures a new assignment within UAB, the UAB Health System, any other employer participating
in the Teacher’s Retirement System or begins receiving state Teacher’s Retirement income. If a displaced
employee obtains employment outside of UAB, all severance pay will be paid regardless of whether the
displaced employee obtains new employment prior to completion of the severance period.

Accrued, unused terminal vacation pay will be paid as a one-time payment and may not exceed allowable
maximum limits for accrual of vacation time. (For current allowable maximum accrual limits, see the Human
Resources Personnel Policies and Procedures Manual or the You & UAB Handbook for Faculty and Staff.)
All UAB equipment (pagers, laptops, etc.) for which the employee is responsible must be returned in
operating condition before the accrued vacation pay-out can be calculated.

Costs for severance pay and benefits are the responsibility of the affected department or unit.

Prior to any communication with affected employees concerning severance pay and benefits, written
notification to the affected employees must be approved (1) by the appropriate senior administrative official
delegated such duties by the President and (2) by the Office of Human Resources.


                                               Implementation

The Vice President for Financial Affairs and Administration is responsible for procedures to implement this
policy.