Home/Answers/Termination & Layoffs

Is my employer required to give me severance pay?

Usually legal Reviewed September 1, 2026
Usually not — no federal law requires severance pay, and declining to offer it is legal. Severance is a voluntary trade: extra money or benefits in exchange for your signed release of claims. The exceptions: a contract, offer letter, handbook or established plan that promises severance can make it enforceable, and mass layoffs can trigger WARN Act pay when notice wasn't given.

Severance is a purchase, not an entitlement: the employer offers something beyond what you're already owed, and you give up the right to sue. Your final wages, accrued PTO in payout states, and COBRA notice are owed regardless — they are not severance, and can't be conditioned on signing anything.

When severance is owed: an employment contract or offer letter that promises it; a written severance plan or handbook policy (which may be an ERISA plan the employer must follow); and, in a mass layoff or plant closing, the WARN Act — 60 days' notice for covered layoffs, with back pay owed when notice wasn't given.

If you're offered severance, remember what it buys: your release. That makes the offer negotiable, and it makes the agreement's terms — what you release, what you keep, what's said about references — worth a careful read. See the severance guide for what a valid release must contain, especially if you're 40 or older.

?

Related questions

My offer letter mentions severance. Does that make it binding?
It can — a written promise of severance in a contract, offer letter, or plan is generally enforceable, and formal severance plans are often governed by ERISA. Bring the document, not the memory, when you ask.
What's the difference between severance and my final paycheck?
The final paycheck (wages plus accrued PTO where required) is owed by law on your state's deadline, unconditionally. Severance is extra, voluntary, and exchanged for a signed release.
§

Sources

Educational content, not legal advice. For a live dispute, consult a licensed employment attorney in your state.