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Administrator Guide
Last Updated: 2023-06-23
Steps: Manage Employee Severance

Steps: Manage Employee Severance

Set up compensation elements and eligibility rules.
You can manage how you compensate terminating employees:
  • Create a severance matrix and worksheets.
  • Assign a severance package to an employee.
  • Integrate with Workday Payroll to pay out the severance package either as a lump sum or continual payments upon termination.
    For third-party payroll users, use the
    Maintain External Payroll Input for Worker
     task for ongoing severance.
When using Workday Payroll for France to calculate and report statutory termination payments, you must manage employee severance payments directly through pay components or pay input.
  1. Access the
    Maintain Event Categories and Reasons
     task and configure the
    Post Termination Compensation
     and
    Severance Assignment
     events.
    Security:
    Set Up: Staffing
     in the Staffing functional area:
  2. Set up these business processes to meet your needs:
    Business Process
    Configuration Details
    Severance Worksheet
    Make sure that the
    Deliver Severance Worksheet
     step is the completion step.
    Request Post Termination Compensation
    Use this process if you don't plan on using severance.
    Termination
    Workday recommends that you configure the
    Review
     or
    Approval
     steps as the completion step. Doing so ensures the fields shared with severance worksheets aren’t changed between the
    Review
     or
    Approval
     steps and the termination completion step.
    Security in the Core Compensation functional area:
    • Set Up: Severance Packages
    • Severance Worksheet
    • Worker Data: Severance Worksheets
  3. Access the
    Maintain WARN Period
     task to configure WARN periods for different locations.
    Workday automatically populates the correct WARN period on the severance worksheet based on worker locations.
    Security:
    Set Up: Severance Packages
     domain in the Core Compensation functional area.
  4. Workday uses a severance matrix to calculate severance amounts, severance payment dates, and notification dates based on length of service and eligibility rules.
  5. Specify the components that are part of the severance event, such as early retirement, plant closing, or reduction in workforce.
  6. Create a worksheet that calculates and adjusts the estimated cost for terminating an employee.
  7. Present the severance policy to the employee outside of Workday.
  8. Record dates when you informed the employee of their severance and when they signed or declined.
    You can use the
    Edit Severance Worksheet Dates
     task to update the signed, declined, or revocation cutoff dates after termination is complete without changing other worksheet data.