Reduction In Force Severance Pay Policy

Reduction In Force Severance Pay Policy Word Document

Purpose

The purpose of this policy is to guide Our Savior Lutheran Church and School in the event that involuntary termination of ministry staff worker(s) is required as determined by the Reduction in Force (RIF) policy and guidelines. This policy is only to be used for RIF situations.  This policy is not intended to be a guide in all severance situations.  

Process

The responsible board will make a recommendation to the church council concerning the payment of severance benefits based on this policy.  Upon approval by the church council the board will then meet with the worker and present the severance pay package.  The board will document and keep a confidential record of consultations with the worker throughout the process.  

Definitions

For the purposes of this policy:
  • “Organization” means Our Savior Lutheran Church and School.
  • “Comparable employment” includes, but is not limited to, full-time employment as a worker in another ministry setting or other secular employment, regardless of the salary or other benefits to be received in another ministry setting or secular employment.
  • “Ministry staff” means a Minister of Religion – Ordained or Minister of Religion – Commissioned positions.
  • “Staff” means other full time worker at Our Savior Lutheran Church and School.
  • “Pro-rata” means a portion of 2.5 weeks of severance will be paid according to the number of years served at Our Savior Lutheran Church and School

Benefits

Except as otherwise provided in this guideline statement, upon the involuntary termination of a full time worker’s service by Our Savior Lutheran Church and School, the church shall pay such worker severance benefits.  A ministry staff person of the organization earns 2.5 weeks of salary (on a pro-rata basis) for each year of called service.  Other staff members shall receive 2 weeks (on a pro-rata basis) for each year of called service. The maximum severance salary shall not exceed 25 weeks.  The minimum severance is 2.5 weeks (regardless of the length of service/employment).  The payments would be equal to the salary and benefits that the worker was being paid at the time he/she was terminated.  Payment of the severance salary shall begin with the first week after the end of the period for which the person was paid his/her regular salary and benefits by the organization.  The payments shall be made according to the regular payroll schedule of the church.

When continued insurance is offered, it will end at the time the worker is newly employed or at the end of the time period agreed upon.

The worker shall receive in writing a copy of the “Severance Agreement” signed and dated by the president of the congregation or his designate, the chair of the board which was responsible for the worker or his/her designate, and the worker.  Such agreement shall clearly list the length of the severance agreement, beginning and ending date of the severance agreement, the total dollars of the agreement, any additional benefits included such as vacation pay, sick pay, retirement, health insurance, annuity, or other payments.  And the agreement must include a description of any other non payment help that the worker shall receive such as counseling, retraining, etc.

The "Severance Agreement” shall follow the format below.

SEVERANCE AGREEMENT

Our Savior Lutheran Church and School agrees to pay to ____(worker’s name) _______ $______(Dollars)________, subject to appropriate and required tax withholding.  In no way does this mean than _________(worker’s name)_________ should consider himself/herself (choose one) called/employed (choose one) at Our Savior Lutheran Church and School during this time.

__________(worker’s name)______________ understands and agrees that the payments made by Our Savior Lutheran Church and School represents salary and benefits and, therefore, Our Savior Lutheran Church and School will withhold from the gross amount of this payment all taxes and other appropriate deductions that it would normally withhold from the earnings of _________(worker’s name)______________, and that Our Savior Lutheran Church and School will report the gross amounts of those payments to governmental agencies as earnings of the individual to whom net payment is made as done in the past.

Although ______(worker’s name)_______ is not otherwise entitled to it, Our Savior Lutheran Church and School agrees to pay and ______(worker’s name)______ agrees to accept the sum of $____(dollars)____ as full and complete compensation.

Severance package payments will be made in the same manner and timing as payroll payments were previously made (on the first and fifteenth day of each month) beginning ___(date)___ and ending ___(date)____.  

In addition to cash payments, Our Savior Lutheran Church and School agrees to provide the following help to _______(worker’s name)_____ through  __(date)___.

(List any additional help to be provided)

This agreement states the entire understanding and agreement between Our Savior Lutheran Church and School and  _____(worker’s name)_______ with respect to its subject matter.  Our Savior Lutheran Church and School has made no promises to the worker other than those contained in the Agreement.  This Agreement may be modified, or any provision waived, only by a signed written agreement of the affected parties.

Dated: ___________, 20__        By: ______________________________
    (President of the Congregation)
Dated: ___________, 20__        By: ______________________________
    (Board Director)
Dated: ___________, 20__        By: ______________________________
    (Worker)
 

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