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Policy 624 -Severance

Section: Benefits
Policy Number: 624
Responsible Office: HR/Benefits
Effective Date: 04/01/01
Revised: 11/18/03; 06/14/05; 02/25/10
Clarified: 05/12/15

Policy Statement

From time to time, changing organizational needs and resources may necessitate an adjustment in the size of the workforce at St. John’s University (“University”). University payments and benefits may be authorized for certain employees who suffer an involuntary loss of employment due to a Reduction In Force (RIF), which may occur when there is a reorganization of a unit; redesign or elimination of a job function; lack of work; lack of funds; relocation of work; or other University-initiated termination for reasons other than discharge for cause.

Definitions

“Annual Compensation” means the total of all compensation, including wages, salary, any other benefit of monetary value, whether paid in the form of cash or otherwise, which was paid as consideration for the employee’s service during the year, or which would have been so paid at the employee’s usual rate of compensation if the employee had worked a full year.

“Base Salary” means an employee’s regular gross annual wages and does not include bonuses, overtime compensation, incentive pay, shift premiums or differentials, reimbursements, expense allowances or any other payments or forms of compensation.

“Eligible Employee” means any full-time employee whose employment is terminated involuntarily by the University due to a RIF, and not for cause, as determined by the University, in its sole discretion. An employee who is out on a leave that is not “job protected” shall not be considered an Eligible Employee under the St. John’s University Severance policy. Job protected leaves include leave covered by the Family and Medical Leave Act (up to 12 weeks) and Personal Leaves of Absence approved by the University.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and any implementing regulations and rulings.

“Policy Administrator” means the University or any individual or entity designated by the University to administer the Policy.

Notice Period

Upon the occurrence of a RIF, the University shall attempt to provide Eligible Employees with four (4) weeks notice of separation (“Notice Period”). If a full Notice Period is not provided, the University will pay affected Eligible Employees an amount equal to their regular Base Salary for the period by which the Notice Period was less than four (4) weeks. (Example: if three weeks notice is provided, the affected Eligible Employees will receive one additional week of regular Base Salary pay.) Once the Notice Period has been communicated to Eligible Employees, further accrual of time off (vacation and/or sick time) ceases. If an Eligible Employee becomes sick/medically disabled during the Notice Period and needs to use accrued sick time, the Notice Period will run concurrently with, not in addition to, the sick time taken. Eligible Employees who wish to use accrued vacation time during their Notice Period may request to do so, and this too will run concurrently with, not in addition to, the Notice Period.

Continued Employment

The Office of Human Resources works with each affected Eligible Employee within the Notice Period to try to identify an internal comparable position for which he or she is considered most qualified. If the Eligible Employee is unable to secure a comparable internal position within the Notice Period, he or she shall be eligible for severance as specified in this Policy in exchange for a signed General Agreement and Release. If a comparable position is offered to the affected employee and he/she declines the offer, the employee will be waiving any right or claim for severance or the special payment and enhanced benefits described below. A comparable position is defined as one within the same salary range or higher.

Special Payment

Eligible Employees shall receive a special payment equal to two weeks’ Base Salary. This special payment will be paid in a lump sum within 30 days of termination of employment. For employees paid on semi-monthly basis, two weeks’ pay is calculated by dividing Base Salary by 52 weeks and multiplying by two (Base Salary  52 x 2 = two weeks pay). For employees paid on a bi-weekly basis, two weeks’ pay is the equivalent of one bi-weekly pay period. The Special Payment does not qualify for the University’s 10% contribution and may not be deferred under the University’s Defined Contribution 403(b) Retirement plans.

Status of Paid Time Off

Eligible Employees are paid for any accrued unused vacation days within 30 days of termination of employment. Vacation payment qualifies for the University’s Defined Contribution 403(b) Retirement plans. Unused sick time has no cash value and Eligible Employees are not paid any amount for their unused sick time.

Status of Benefits without a Signed General Agreement and Release

HR policy #125, Separation from Employment, shall govern the status of employee benefits upon termination. HR policy #620, Benefits for Retired Employees shall govern the status of benefits in retirement. For more information, contact the Benefits Office at (718) 990-2363.

Severance Pay in Exchange for a Signed General Agreement and Release

Eligible Employees who sign a General Agreement and Release shall receive severance pay based on years of full-time service at the University (or adjusted service date) in accordance with the schedule below. Eligible Employees who choose not to sign a General Agreement and Release shall not receive any severance pay.

The amount of severance pay is based on an Eligible Employee’s Base Salary at the date of termination (see definitions section for definition of “Base Salary”). In no event will severance pay and the value of the Enhanced Benefits described below exceed two times an Eligible Employee’s Annual Compensation during the year immediately preceding the date of termination.

Payment Options: Eligible Employees who sign a General Agreement and Release may select to receive their severance pay from two payment options: 1.) Severance may be received as a lump sum payment within 30 days from termination of employment; or 2.) Payment may be received in the same manner as the Eligible Employee currently receives pay (bi-weekly or semi-monthly) for the duration of the applicable severance period.

Severance pay is subject to tax withholding. Taxes will be withheld at the applicable flat rate, including all Federal, State, Local and FICA taxes. No portion of severance pay may be deferred under the University’s Defined Contribution 403(b) Retirement plans, nor is any portion eligible for the University’s 10% contribution.

Beneficiary Designation: The Eligible Employee may designate a beneficiary(ies) to receive any balance of the severance payments should he or she die before the full amount of the separation allowance has been paid. In the absence of a named beneficiary(ies), any remaining payments will be made to the Eligible Employees’ estate.

Severance Payment Schedule

Years of ServiceSeverance
Less than one year=4 weeks
(minimum benefit)
1- but less than 2 years=5 weeks
2- but less than 3 years=6 weeks
3- but less than 4 years=7 weeks
4- but less than 5 years=8 weeks
5- but less than 6 years=9 weeks
6- but less than 7 years=10 weeks
7- but less than 8 years=11 weeks
8- but less than 9 years=12 weeks
9- but less than 10 years=13 weeks
10- but less than 11 years=14 weeks
11- but less than 12 years=15 weeks
12- but less than 13 years=16 weeks
13- but less than 14 years=17 weeks
14- but less than 15 years=18 weeks
15- but less than 16 years=19 weeks
16- but less than 17 years=20 weeks
17- but less than 18 years=21 weeks
18- but less than 19 years=22 weeks
19- but less than 20 years=23 weeks
20- but less than 21 years=24 weeks
21- but less than 22 years=25 weeks
22- but less than 23 years=26 weeks
23- but less than 24 years=27 weeks
24- but less than 25 years=28 weeks
25- but less than 26 years=29 weeks
26- but less than 27 years=30 weeks
27- but less than 28 years=31 weeks
28- but less than 29 years=32 weeks
29- but less than 30 years=33 weeks
30- but less than 31 years=34 weeks
31- but less than 32 years=35 weeks
32- but less than 33 years=36 weeks
33- but less than 34 years=37 weeks
34- but less than 35 years=38 weeks
35- but less than 36 years=39 weeks
36- but less than 37 years=40 weeks
37- but less than 38 years=41 weeks
38- but less than 39 years=42 weeks
39- but less than 40 years=43 weeks
40- but less than 41 years=44 weeks
41- but less than 42 years=45 weeks
42- but less than 43 years=46 weeks
43- but less than 44 years=47 weeks
44- but less than 45 years=48 weeks
45- but less than 46 years=49 weeks
46- but less than 47 years=50 weeks
47- but less than 48 years=51 weeks
48- but less than 49 years=52 weeks
Over 49 years=52 weeks

Enhanced Benefits in Exchange for a Signed General Agreement and Release

Eligible Employees who sign a General Agreement and Release shall be entitled to certain enhanced benefits as part of the severance offer. Eligible Employees who choose not to sign a General Agreement and Release are not entitled to the enhanced benefits.

Medical and Dental Insurance

The University will continue the Eligible Employee’s current level of medical and dental benefits at no cost to the Eligible Employee, under the present plan or another plan designated by the University, for the same number of weeks for which the Eligible Employee is entitled to receive severance pay.

At the end of this University-provided coverage period, Eligible Employees shall be eligible to continue their medical and/or dental coverage for the remainder of the time allowed under the Consolidated Omnibus Budget Reconciliation Act (COBRA) at the COBRA rates in effect from time to time.

Basic Life Insurance

The University will continue the Eligible Employee’s basic life insurance policy at no cost to the Eligible Employee, under the present plan or another plan designated by the University, through the end of the month following the month in which the termination occurs. At the end of this University-provided coverage period, Eligible Employees may convert their life insurance to an individual policy at their own expense. Eligible Employees who are also retirement eligible may continue a $10,000 policy at the group rate.

Tuition Remission

Eligible Employees and/or spouse and children who are currently enrolled and utilizing Tuition Remission benefits at the time of termination of employment will be eligible to continue to receive these benefits for the remainder of the semester in which the termination of employment occurs, plus one additional semester.

Election Period/Revocation of Election

In compliance with applicable law, Eligible Employees will be granted a period of time to review and determine whether or not they wish to sign the General Agreement and Release in exchange for the Severance Pay and the Enhanced Benefits described above. Eligible Employee will also be granted a period of time to revoke their execution of the General Agreement and Release. The time periods granted are as defined in the General Agreement and Release document.

Outplacement and other Assistance

The University may, at its discretion, decide to offer outplacement services or other assistance to Eligible Employees, but there is no guarantee or entitlement to such assistance.

Reservation of Rights

The University reserves the right to terminate or amend this Severance Policy at any time and in any manner. It is not intended that any employee obtain any vested right to any benefits under this Policy. Accordingly, any termination or amendment of the Severance Policy may be made effective immediately with respect to any benefits not yet paid or provided, whether or not prior notice of such amendment or termination has been given to affected employees.

Discretionary Authority

The Policy Administrator shall from time to time establish uniform rules for the administration of the Policy, and shall decide any matters relating to Policy administration. The Policy Administrator shall have the exclusive right to interpret the Policy, and shall have the authority to construe any uncertain or disputed term or provision in the Policy. The Policy Administrator’s exercise of this discretionary authority to construe the terms of the Policy shall be binding upon all interested parties.
The Policy Administrator shall endeavor to act by general rules so as not to discriminate in favor of any person. The decisions and the records of the Policy Administrator shall be conclusive and binding upon the University, employees and all other persons having or claiming an interest under the Policy.

Funding

Plan benefits under the Policy shall be paid from the general assets of the University as benefit payments become due. No asset will be acquired, nor any fund created, to provide for the payment of benefits. The rights of Eligible Employees shall be solely those of unsecured creditors of the University.

To the maximum extent permitted by law, no benefit under this Policy shall be assignable or subject in any manner to alienation, sale, transfer, claims of creditors, pledge, attachment or encumbrances of any kind.

Reemployment

If an Eligible Employee is reemployed by the University following the date of his or her termination of employment, payment of any benefits under the Policy shall cease.

Invalidity

The invalidity or unenforceability of any term or provision of this Policy shall not affect the other terms and provisions, and such invalid or unenforceable term or provision shall, in all events, be construed and enforced to the fullest extent permissible under law.

General Information

Set forth in Appendix “A,” which may be requested and made available from the Benefits Office and is also accessible online via the Human Resources Benefits web page, is certain information that is required to be provided pursuant to ERISA.

 

St. John's University, New York
Human Resources Policy Manual