ARIZONA STATE SENATE
Phoenix, Arizona
public employees; severance
pay
(NOW: town officers;
severance pay)
Purpose
Allows common councils to provide severance pay for town officers.
Background
Severance pay is an amount that is promised to an employee if the employee is terminated without cause. It is often equal to compensation for one or more months of salary.
The Arizona State Court of Appeals has ruled that severance provisions in contracts with government appointees are invalid under current law. According to several towns, the inability to offer severance pay to town officers makes it difficult to recruit the best candidates to positions such as town manager that serve at the pleasure of the governing body.
There is an undetermined fiscal impact associated with this bill.
Provisions
1. Allows common councils to provide severance pay for town officers by ordinance or contract with individual officers.
2. Provides for a general effective date.
House Action
CM 1/31/00 DPA 4-0-2
3rd Read 2/28/00 41-11-8
Prepared by Senate Staff
March 2, 2000