It seems that much of HN has very little knowledge of (and interest in) business operations and employment law in other countries.
I see your question as genuinely inquiring about this stark difference from what is common in Europe and other countries.
Here is my take on the situation:
Let's say I own a widget factory and you are highly skilled at turning paper clips into widgets. We agree on a price for your time and I hire you to start making widgets. Things are going gangbusters, you produce a ton of widgets and I pay you for the time you spend working for me. All of a sudden people stop buying widgets. I no longer need your services so I have you stop coming in and stop paying you for your time.
I don't understand why I should be obligated to pay you for services you didn't provide. It's not like I can go to my customers and ask them to pay me for widgets I didn't sell them.
Most people (who don't own things like factories) need a regular, predictable, stable income to survive, and finding new employment is not always easy.
Therefore, people in most developed countries have agreed that by taking on an employee, it is contingent on the employer to provide some guarantee of stability. This is borne out by laws restricting firing in many cases, and requiring severance pay in the event.
The USA is an aberration in this regard - even the workers seem to value the rights of the employers far above the rights of the employees. I'm not sure why this is.
I live in the UK. Here the obligation is symmetric. All my recent work has been on 90 day terms. That is, if either I or the employer wish the contract to end normally that requires 90 days of notice unless both parties agree otherwise.
My most recent employer decided their costs were too high compared to projected income, so they gave me 90 days notice back in 2019.
At that point I knew that in 90 days I won't have a job. I could start looking for a new job, able to tell any prospective employer that I can start on day D+90. I would still get paid, as usual, and my employer was entitled to insist that I continue to work as usual.
In fact of course they gave me garden leave, I guess that's probably an alien term in the US too? Garden leave means that the 90 day term still applies, you still work for them not anybody else, and they still pay you fully - but your employer thinks it would be best (for example because they're scared you will sabotage things, poach customers, or steal trade secrets) that you do not come to the office or use their computers and thus you cannot do your job.
I'm very awkward so I pointed out that they're short of cash, rather than having too many engineers, and so since I wasn't doing anything else I kept working, although I will admit I wasn't exactly the most motivated team member since I knew I was terminated. They had to go re-enable my git access, AWS access and so on, which had been severed when I went in to be told I was fired. Very amusing.
Now, let's roll back to my previous job. I'd been essentially head-hunted, I informed that employer that I'd be leaving, triggering the 90 day notice. I was actually at their offices at the time, (I usually work from home) and I informed them that I'd be available until close-of-play to negotiate the exact details. They got right down to the wire but eventually sent someone to work it out, and we agreed I would spend the notice period spinning up people who'd been brought in to learn what I do, and that I wouldn't take my vacation days, but I would actually leave on D+85 not D+90.
Why is it a good idea?
Employees less likely to leave without notice.
Employees stay longer because the safety net grows.
Less likely to speak poorly about you after leaving
More secure in their job. More emotional invested.
What are your reasons for not? Even if google stops selling at home they will keep the server alive for a grace period.
I had a friend who ran a bitcoin market. When the market shutdown he was responsible for customer records for 7 years and had to pay a company to secure access in case of requests.
You may have bought raw materials, hired people, set up a warehouse and stocked it with products anticipating my orders, but I don't understand why I should be obligated to pay for your products if I no longer need them.
All contracts generally include terms for termination of the contract. The tone of indignation is in the US, employers determine them unilaterally and employees don't have the bargaining power to do anything about it.
Employment law in Europe, for example, frequently requires the severance terms to be determined at the time the employee is signed up. The employment agreement is a contract, and will be signed by all positions in the firm. In many cases, the severance terms are based on law.
Among other differences, for example, a German President is personally liable for the financial obligations of their company. If the company goes bankrupt, so does he.
I would imagine if a director breaks the law, only then he could be personally liable. And in that case I would imagine Germany does have higher standards than US.
Not really. Directors are not generally held liable for debts incurred by their companies in Germany. However, they can be held liable if they are found to be in breach of their duties as directors. Also, the onus of proof is reversed in some cases (e.g. the director needs to prove he wasn't in breach of his duty).
In US new enterprise have a very high failure rate, how do entrepreneurs survive in such environment?
the UK is one week's pay for every year, but with a maximum of £538/week and a maximum of 20 years for length service.
given that a software engineer who's been at AirBnB for two years is going to get 16 weeks of pay and probably makes _at least_ 180k/year, they're probably getting around $55k.
This compensation does not sound "vastly more generous", but not bad for those that were less than 5 years employed.
So yes, when you collect the deferred salary it feels generous. But you were getting less salary up until that point in order to make the system solvent.
One may well prefer this arrangement, but one can't evaluate the generosity of the payment without also accounting for the cost that made it possible.
Which country do you live in? Is it common practice for all employees to have severance negotiated as part of an employment contract? What happens if the employee decides to leave the employer before the contract expires?
Some examples:
- somebody who makes 5000 euro gross per month who's 20 years with the same company would get ~15 months severance.
- somebody who makes 3000 euro gross who's 5 years at a company would get 7 months of severance.
Interestingly enough, the age of the employee is a factor of the equation!
When it's the employee who decides to leave the company, the company can require them to stay on for many months, again depending on how long the employee was with the company. Or the company can agree to release earlier, but it will still be on the hook for a significant amount of months of salary.
Let's just say that the decision to hire an engineer isn't done lightly.
Benefits vary greatly. It has been awhile since I worked with this stuff, but IIRC Massachusetts is the highest payout ($750+) and places like Alabama, Florida, Mississippi and Arizona are <$300.
Severance is usually part of an employee contract (if one exists) or commonly part of an agreement at separation where the employer gets some benefit (waiving the right to sue, etc).
We can see from the priorities how workers have been left out of the decision making for decades in the US.
Just like, for example, there's no legal requirement to pay employees bonuses, so bonus pay is at the employer's sole discretion. In fact, salary itself is at the employer's sole discretion other than complying with minimum wage and overtime laws.
It's been my experience that severance for rank-and-file employees is rarely offered and is very miniscule if it is paid.
Grow fast and flame out? That’s ok. Shut it down as gracefully as possible and try again.
Severance pay is voluntary. So of course they can decide how much they want to pay.
You spelled weeks wrong.
Apply to a position and hope to be moved over with a L1 visa?
Find an employer who is willing to hire you and go through H1B visa lottery, which is the normal work visa.
Enroll in a US university, ideally a STEM degree, and use the OPT visa extension to get a foothold in the US.
Marry an American?
Probably plenty more options, but I'm not an expert in US immigration.
What are you referring to here? How much money buys you? Aka: costs of living?
How much you make, converting EUR to USD?
What industry? IT?
I worked in a leadership position at a multi-national in Berlin for almost five years. I know the salaries the engineers had in CA & Chicago vs Germany. US was maybe 20% more max. In terms of what it buys you ... not so much. See below.
Cost of living in Munich (one of Germany's most expensive cities) vs. SF.[1] And then Berlin (one of Germany's cheapest cities) vs. SF.[2]
[1] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
[2] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
Remember that there are people outside IT/SV!
I look frequently, because if the pay was equal (or even 3/4) I'd love to live in Europe.
Which basically the average Silicon valley wage is the wage I am making now. However that is with quite a bit of seniority, I've noticed offers from Germany are generally lower than what I make but Germany costs less. If I were starting out right now I would probably make 60% of what I make now.
My guesstimate of the difference has always been that a years pay in Denmark was equivalent to 8 months pay in the better paid parts of the U.S.
Also, they're referring to white collar tech employees. All salaried, all well above minimum wage and most definitively the highest paid (in that industry) in the world, including outside of SF/the Bay.
From a company standpoint, not having to accrue the liability on the ledger simplifies the accounting auditability & ability to close your books monthly.
On the other hand, I understand people who are on tighter budgets who would rather have their revenue better aligned with their expenses rather than having to balance them on their own.
I was at a company in the UK where a department closed. They offered 3 months, plus a month per year served. And for first round they offered a 6 month bonus for volunteers vs stay and try to get an internal transfer.
I was surprised how few volunteers there were. I don't think I've had a job I wouldn't walk from for a years pay. Those that were chopped second round were pissed.