Emily1991
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Thanks for your help guys! :D
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Thanks for the clarification Luke! I'm leaning towards annualized. The regs give a definition of annual compensation and part of it states "or which would have been so paid at the employee's usual rate of compensation if the employee had worked a full year".
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The way I'm reading it is if a person was working in the previous year and then was fired in 2018, they would receive 2 years of compensation at their 2017 salary. 29 C.F.R. § 2510.3-2(B)(ii) provides “the total amount of such payments does not exceed the equivalent of twice the employee’s annual compensation during the year immediately preceding the termination of his service.” So in this case the year immediately preceding his termination would be 2017. Would that make sense?
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My question relates to 29 CFR 2510.3-2(b) Severance Pay Plans The Regulations state "the total amount of such payments does not exceed the equivalent of twice the employee's annual compensation during the year immediately preceding the termination of his service." What does the phrase "the equivalent of" mean? Is the DOL referring to the time value of money? Additionally, in referring to the annual compensation, how is that determined? Is the annual compensation the employees previous years salary or is it the salary it would have been if he had continued working? Essentially I'm asking if anyone knows what they mean by "usual rate of compensation". Any thoughts? Thank you!