Did the seller of the company tell you that everyone knows their job because they have been here for 25 years? Sounds great from a continuity point of view but this can be a hidden liability. What happens if they do not get along with the new owner or they work too slowly and the new owner wants to terminate the employee? Each country, state and province have different labour laws and I recommend that you contact your lawyer to understand the laws in your area but the severance cost may be based on their 25 years of employment and not from the time that you acquired the business. Depending on the number of long term employees in the company when you buy the company, the potential severance costs can be substantial. You may want to factor that into the calculation of the purchase price of the business.