Severance Pay is a compensation package provided to employees upon termination, layoffs, or workforce downsizing. It serves as financial support during the transition period and may include salary continuation, benefits coverage, accrued leave payouts, and additional allowances. Severance pay policies vary based on employment contracts, company policies, and labor laws, ensuring compliance with legal and ethical workforce management practices.

Industries such as manufacturing, retail, logistics, e-commerce, and facility management services (FMS) often deal with contract expirations, workforce restructuring, or seasonal employment shifts, making severance pay a crucial component of employee exit management. Businesses that implement clear severance policies, automated payroll processing, and compliance tracking can ensure fair employee treatment, legal adherence, and protection against disputes, ultimately enhancing workforce trust and corporate reputation.