JusticeRights guide · United States

Your rights

Severance pay: is it required, your 21 days to decide, and the agreement

FEDERALFederal law sets the age-waiver rules (21, 45 and 7 days) and the WARN layoff notice in every state; severance itself is owed only by a contract, a written policy or plan, or a state statute such as New Jersey's or Maine's.Checked by the Justice legal team against official sources · Last reviewed

Short answer

No federal law requires severance pay. It is owed only when a contract, a written policy or plan, or a state law such as New Jersey's promises it. If you are 40 or older and the agreement waives age claims, you get at least 21 days to consider it, 45 in a group layoff, and 7 days to revoke.

Date calculator · 19 rules

Your severance dates: the days to decide, the days to revoke, and the layoff notice

The federal age-waiver rules apply in every state; each state's layoff notice law is read from its statute or labor agency · checked Oct 22, 2026

Which rule?

How was the agreement offered?
A group program is an offer to 2 or more employees; it gets 45 days instead of 21.

Pick your state, or the federal rule, and enter the date you got the final offer.

    Rehearse the conversationThe 21, 45 and 7 days explained

    Each rule comes from the official source linked in the result. It runs on your device: nothing you type is stored or sent. General information, not legal advice.

    Key points

    Federal rule
    No federal law requires severance pay: the FLSA has no severance requirement, so it is a matter of agreement. It is owed when a contract, a written policy or an employer plan promises it, and EBSA may be able to help when a plan's severance is not paid.
    Age 40 or older
    A valid waiver of age claims gives you at least 21 days to consider it (45 days in a group exit program), 7 days to revoke after you sign, written advice to see a lawyer, and something extra you were not already owed.
    Layoff notice
    Federal WARN: 60 days' written notice of a plant closing or mass layoff at an employer with 100 or more employees, or back pay and benefits for up to 60 days. New York and New Jersey require 90 days.
    Severance by statute
    New Jersey: 1 week of pay per full year of service in a covered mass layoff, plus 4 weeks if notice was short (since April 10, 2023). Maine: 1 week's pay per year at a covered closing or mass layoff, after 3 years of service.

    Severance pay is not required by federal law, but the agreement that comes with it is regulated. The U.S. Department of Labor says the Fair Labor Standards Act has no severance requirement: severance is a matter of agreement, or a promise in a contract, written policy or benefit plan. What federal law does control is the release you are asked to sign. If you are 40 or older, the Older Workers Benefit Protection Act gives you at least 21 days to consider it (45 days in a group program) and 7 days to change your mind after signing. And in a large layoff, the WARN Act and state laws require advance notice, 60 days under federal law and 90 days in New York and New Jersey, and New Jersey and Maine require severance itself.

    Below: when severance is owed, what a severance agreement asks you to give up and what it cannot take, the 21, 45 and 7 days counted from your own dates, layoff notice laws state by state with their effective dates, taxes and unemployment, how to negotiate, a letter to ask for time and better terms, and the answers to common questions. If you think the firing itself was illegal, read wrongful termination before you sign. This page explains the law; it is not legal advice.

    Is severance pay required by law?

    No federal law requires severance pay. The Department of Labor puts it plainly: there is no requirement in the Fair Labor Standards Act for severance pay, and it is a matter of agreement between an employer and an employee. It is usually based on length of employment. So the first question is not what the law gives everyone but what your employer promised, and whether your state is one of the two on this page that require severance in a layoff. U.S. Department of Labor: Severance pay

    • A written promise is what you are owed. If your employment contract, offer letter, union contract or a written company policy promises severance, that promise sets what you are owed. In Texas, for example, the Texas Workforce Commission says that under the Texas Payday Law severance pay is not owed unless it is promised in a written policy.Texas Workforce Commission: Final pay, severance benefits
    • A severance plan is a benefit plan. If your employer has a severance plan and did not pay you under it, the Employee Benefits Security Administration (EBSA) of the Department of Labor may be able to help. Ask for a copy of the plan document, and call EBSA at (866) 444-3272.U.S. Department of Labor: Severance pay · EBSA
    • New Jersey: severance by statute in a covered layoff. An employer with 100 or more employees that terminates 50 or more employees at or reporting to a New Jersey establishment within 30 days, in a mass layoff, closing or transfer, must pay each terminated employee 1 week of pay for each full year of employment, and an additional 4 weeks of pay if it gave less than the 90 days' notice the law requires. The rate is the higher of your average regular rate over your last 3 years and your final regular rate. A waiver of this severance is not effective unless the Commissioner of Labor and Workforce Development or a court approves it. In force since April 10, 2023.N.J.S.A. 34:21-2(a), 34:21-2(b), 34:21-2(e)
    • Maine: severance at a closing or mass layoff. At a covered establishment, a facility that employed 100 or more people at any time in the past 12 months, an employer that closes or makes a mass layoff owes each employee with at least 3 years of continuous service 1 week's pay for each year of service, and partial pay for a partial year, within one regular pay period after the last full day of work. A week's pay is your gross earnings over the last 12 months divided by the number of weeks you had earnings.26 M.R.S. § 625-B(2)
    • Everywhere else on this page: notice, not severance. The other state laws in the table below, and the federal WARN Act, require advance notice of a layoff and back pay when it is missing. They do not require severance. Hawaii adds a dislocated worker allowance that tops up unemployment benefits for up to 4 weeks after a covered closing.29 U.S.C. § 2104 · Hawaii DLIR: Dislocated Workers Act
    Tip. Severance is not your final paycheck. Wages you already earned are owed whether or not you sign anything, on the deadline your state sets: see your final paycheck. The EEOC says the payment for a release cannot simply be earned vacation pay, sick pay or a pension you already have; it must be something more. EEOC: Understanding waivers of discrimination claims in employee severance agreements

    What a severance agreement is, and what you give up

    A severance agreement, also called a separation or termination agreement, is a contract that sets the terms of your exit. The EEOC describes its usual paragraphs: the date your job ends, the severance payments, benefits, references, the return of company property, and a release of claims against the employer. Its sample agreement reads “The Company agrees to pay you X weeks of severance pay”, as a lump sum or spread over a number of weeks, less taxes. In exchange, you usually give up the right to sue over your job and your firing, including discrimination claims. EEOC: Understanding waivers of discrimination claims in employee severance agreements

    • You must get something extra. The payment for your release must be something of value you were not already entitled to: not your earned vacation pay, a pension you already have, or wages already due. The EEOC's examples are a lump sum equal to a percentage of your annual salary, or salary payments for a set time after you leave.EEOC Q&A · 29 C.F.R. § 1625.22(d)
    • You can still go to the EEOC. No agreement can stop you from filing a charge with the EEOC or taking part in an EEOC investigation, and you cannot be required to return your severance before filing a charge. A clause that tries is invalid and unenforceable. See filing an EEOC discrimination charge.29 U.S.C. § 626(f)(4) · EEOC Q&A
    • Some claims cannot be released. The EEOC tells employees to make sure the agreement does not release claims for unemployment benefits, workers' compensation, claims under the Fair Labor Standards Act (such as unpaid minimum wage or overtime), COBRA health coverage, vested retirement benefits under ERISA, or claims that arise after you sign.EEOC Q&A, Appendix A · 29 U.S.C. § 626(f)(1)(C)
    • Age claims: you need not give the money back to challenge the waiver. If you claim that a waiver of age claims was not knowing and voluntary, you do not have to return the severance before you sue or file a charge, and the agreement cannot penalize you for challenging it. Under Title VII, the ADA and the Equal Pay Act, the EEOC says the law is less clear: some courts require the money back first.29 C.F.R. § 1625.23 · EEOC Q&A
    • Unemployment, COBRA and your last pay are separate. Your right to apply for unemployment benefits, to keep your health plan under COBRA, and to your final wages does not depend on signing. Severance can still change when unemployment starts in some states: see the taxes and unemployment section below.EEOC Q&A, Appendix A

    Many severance agreements also repeat or add a non-compete; whether it binds you depends on your state's law: see non-compete agreements.

    Watch out. Signing usually ends your claims. If you believe you were let go because of age, race, sex, religion, disability or another protected reason, or in retaliation, weigh the payment against those claims before you sign; the EEOC suggests having an attorney review the agreement. The EEOC charge deadline, 180 days and 300 days in many states, keeps running while you negotiate. EEOC Q&A · EEOC: How to file a charge

    Age 40 or older: 21 days to consider, 7 days to revoke (OWBPA)

    If you are 40 or older and the agreement waives age-discrimination claims under the Age Discrimination in Employment Act (ADEA), the Older Workers Benefit Protection Act sets minimum rules in 29 U.S.C. § 626(f). Without every one of them, the waiver of your age claims is not knowing and voluntary, and an employer that relies on it has to prove in court that it is. The ADEA protects people who are at least 40 years of age and covers employers with 20 or more employees. 29 U.S.C. §§ 626(f), 630(b), 631(a)

    • In writing, in plain words, naming the ADEA. The whole agreement must be in writing, written to be understood by you or by the average person eligible, and must specifically refer to rights or claims under the ADEA.29 U.S.C. § 626(f)(1)(A), (B) · 29 C.F.R. § 1625.22(b)
    • No future claims. You cannot waive rights or claims that arise after the date you sign.29 U.S.C. § 626(f)(1)(C)
    • Something extra. The waiver must be paid for with something in addition to anything of value you are already entitled to.29 U.S.C. § 626(f)(1)(D)
    • Advice to see a lawyer, in writing. The agreement must advise you in writing to consult an attorney before you sign.29 U.S.C. § 626(f)(1)(E)
    • 21 days to consider it, or 45 days in a group program. You must be given at least 21 days to consider the agreement. If it is offered as part of an exit incentive or other employment termination program offered to a group or class of employees, at least 45 days. A program exists when the employer offers the deal to 2 or more employees, as in a reduction in force. The period runs from the date of the employer's final offer, and a material change to the offer restarts it, unless you and the employer agree that changes do not.29 U.S.C. § 626(f)(1)(F) · 29 C.F.R. § 1625.22(e)(4)
    • 7 days to revoke after you sign. After you sign, you have at least 7 days to revoke, and the agreement does not take effect until those 7 days have passed. The 7 days cannot be shortened by agreement or otherwise.29 U.S.C. § 626(f)(1)(G) · 29 C.F.R. § 1625.22(e)(5)
    • A group program comes with a list. In a group program, the employer must tell you in writing, at the start of the 45 days, which group of employees the program covers, its eligibility factors and time limits, the job titles and ages of everyone eligible or selected, and the ages of the people in the same job classification or unit who were not. Age bands broader than one year do not satisfy the rule.29 U.S.C. § 626(f)(1)(H) · 29 C.F.R. § 1625.22(f)

    You may sign early, before the 21 or 45 days end; the 7 days to revoke then start. That is allowed only if your choice is knowing and voluntary, and not pushed by the employer through fraud, a threat to withdraw or change the offer before the period ends, or better terms for people who sign early. 29 C.F.R. § 1625.22(e)(6)

    The facts
    Age 52, agreement handed over November 2She alone is being let go, so it is not a group program.
    Last day to consider
    November 23November 2 + 21 days. In a group program it would be November 2 + 45 days: December 17.
    She signs
    November 20Early, by her own choice; the 7 days to revoke start now.
    Last day to revoke
    November 27November 20 + 7 days. The agreement takes effect only after the 7 days have passed.
    Tip. Count from your own dates. The calculator at the top of this page counts the 21 or 45 days from the day you got the final offer and the 7 days from the day you sign, and puts both in your calendar. 29 U.S.C. § 626(f)(1)(F), (G)

    Layoff notice: the WARN Act's 60 days, and pay when notice is missing

    The Worker Adjustment and Retraining Notification (WARN) Act, in force since February 4, 1989, does not require severance. It requires notice: an employer may not order a plant closing or mass layoff until the end of a 60-day period after it serves written notice on each affected employee (or the union), the state dislocated-worker unit and the local government. 29 U.S.C. § 2102(a) · DOL: Worker's Guide to Advance Notice of Closings and Layoffs

    • Who is covered. Employers with 100 or more employees, not counting part-time workers (those who average fewer than 20 hours a week, or were employed fewer than 6 of the last 12 months), or with 100 or more employees who together work at least 4,000 hours a week.29 U.S.C. § 2101(a)(1), (8)
    • What triggers it. A plant closing: a shutdown of a site or unit that causes employment losses for 50 or more full-time employees in any 30-day period. A mass layoff: in any 30-day period, at least 33% of the full-time employees at the site and at least 50 of them, or at least 500 employees. A layoff of more than 6 months, or a cut of more than 50% in hours in each month of a 6-month period, counts as an employment loss.29 U.S.C. § 2101(a)(2), (3), (6)
    • Exceptions. Shorter notice is allowed when the employer was actively seeking capital to avoid a shutdown or when the cause was a business circumstance that was not reasonably foreseeable, and no notice is needed for a natural disaster. The employer must still give as much notice as is practicable, with the reason.29 U.S.C. § 2102(b)
    • If notice was not given: up to 60 days of pay and benefits. The employer owes each affected employee back pay for each day of the violation, at the higher of the average regular rate over the last 3 years and the final regular rate, plus benefits, including medical costs a plan would have covered, for up to 60 days, but never for more than half the days you worked there. A local government can collect up to $500 a day. You enforce it yourself, in federal district court; the Department of Labor has no role in enforcement.29 U.S.C. § 2104(a) · DOL: Worker's Guide to WARN
    • Severance and WARN pay: credited or not. The Department of Labor says pay in place of notice usually means the employer has already paid the WARN penalty. A voluntary and unconditional payment that no legal obligation required can be credited against WARN back pay; severance required by a contract or the employer's personnel policies cannot. A release you sign for extra pay or benefits may also waive WARN claims.29 U.S.C. § 2104(a)(2) · DOL: Worker's Guide to WARN
    Last day of work
    December 21A mass layoff at a covered employer.
    Federal notice due by
    October 22December 21 minus 60 days; the same in California, Illinois, Hawaii, Maryland, Washington and Wisconsin.
    New York, New Jersey, a Maine closing
    September 22December 21 minus 90 days.
    Iowa
    November 21December 21 minus 30 days.
    Watch out. The “notice should have come by” date in the calculator matters only for a covered layoff. If your employer is below the size limits, or the layoff is below the thresholds above and in your state's row below, no notice period applies and the date is for reference only. 29 U.S.C. § 2101(a)

    Severance and layoff notice laws by state

    The state rules the calculator uses, read from each state's statute or labor agency on October 21 and 22, 2026. A state law applies on top of federal WARN, and an employer covered by both must meet both, so the longer notice period is the one to watch. We also checked Michigan, South Carolina, Kansas, Rhode Island, Pennsylvania, Oregon, the District of Columbia and Virginia: their labor agencies describe only the federal rule (South Carolina repealed its old shutdown-notice law in 2010), so they follow federal WARN, as do the states not listed. 29 U.S.C. § 2102 · the state sources listed at the end of this page

    StateWho is coveredNotice before the layoffSeverance required by lawIf notice is missingIn force sinceLaw
    Federal (every state)100 or more employees; a closing that affects 50 or more, or a mass layoff of 33% and at least 50, or 50060 daysNoneBack pay and benefits for up to 60 days; a suit in federal district courtFebruary 4, 198929 U.S.C. §§ 2101–2104
    California75 or more employees, full- and part-time; a layoff of 50 or more in 30 days, any plant closure, or a relocation of at least 100 miles60 daysNoneBack pay at the higher of the final or 3-year average rate, and benefits, for up to 60 days; a civil penalty of $500 a dayIn force; new notice contents for 2026 (SB 617)Cal. Lab. Code §§ 1400–1408
    ConnecticutEmployers that send a federal WARN notice (100 or more full-time workers)60 days (federal rule; no state period)NoneFederal remedies; § 26 states no penaltyOctober 1, 2026 (AI disclosure, Public Act 26-15); health insurance rule repealed June 6, 2024Public Act 26-15, § 26 (Conn. 2026); Conn. Gen. Stat. §§ 31-51n, 31-51o (repealed)
    Delaware100 or more employees (or 100 or more working at least 2,000 hours a week in total); a closing that costs 50 or more jobs in 30 days, a layoff of 50 or more who are 33% of the site, or 500 or more, or a move of 50 miles or more60 days, to employees, the Department of Labor and the local workforce boardNone (the notice must describe any severance offered)Back pay and benefits for up to 60 days or half the days employed; $1,000 a day or $100 a day per worker; suit within 3 yearsIn force 180 days after July 11, 2018 (HB 409, 81 Del. Laws c. 312)19 Del. C. §§ 1901–1911, 1904(a), 1904(b), 1909, 1910
    Hawaii50 or more people employed in the state, at a closing, partial closing or relocation tied to a sale, merger, takeover or bankruptcy60 days, to each employee and the stateNone; a dislocated worker allowance tops up unemployment for up to 4 weeksAsk the Department of Labor and Industrial Relations (DLIR)Checked October 21, 2026HRS ch. 394B · HAR § 12-506
    Illinois75 or more full-time employees; a mass layoff of 25 or more if one-third of the site, or 250 or more60 daysNoneBack pay and benefits for up to 60 days; a civil penalty of up to $500 a day; a complaint to the Illinois Department of LaborChecked October 21, 2026820 ILCS 65
    Iowa25 or more employees; a plant closure or mass layoff30 daysNoneAsk Iowa Workforce DevelopmentChecked October 21, 2026Iowa WARN Act
    MaineA facility with 100 or more people in the past 12 months; a closing, or a mass layoff of 33% and at least 50, or 500, lasting at least 6 months90 days before a closing; a mass layoff is reported to the state within 7 days1 week's pay per year of service, after at least 3 yearsThe Bureau of Labor Standards investigates unpaid severanceCurrent text, last amended by P.L. 2023, c. 5226 M.R.S. § 625-B
    Maryland50 or more employees; layoffs of at least 25% of the workforce or 15 employees, whichever is greater, over 3 months60 daysNoneAsk the Maryland Department of LaborRegulations effective October 13, 2025Economic Stabilization Act, as amended by SB 780 (Chapter 407 of 2020)
    MassachusettsPlant closings certified by the Department of Unemployment Assistance: 50 or more workers in the last 6 months, at least 50% permanently let go60 days (federal rule, restated by MassHire)None required; a lump-sum severance in a certified plant closing may not block unemployment benefitsNot checked for this pageNot checked for this pageG.L. c. 151A §§ 71A–71H · DUA employer guide
    MinnesotaA plant closing of 50 or more employees in 30 days (not counting those under 20 hours a week); report duty for any employer sending federal WARN notice60 days (federal rule); state notice voluntaryNoneNo state penaltyCurrent; history 1989 c 282 to 2004 c 206Minn. Stat. § 116L.976
    New Hampshire100 or more full-time workers; a closing of 50 or more in 30 days, or a layoff of 250 or more, or 25 or more who are 33%60 days, to workers, the town, the Attorney General and the Labor CommissionerNone statedNot checked for this pageNot checked for this pageRSA 275-F · NH Employment Security
    New Jersey100 or more employees; 50 or more terminated at or reporting to an establishment in 30 days; part-time employees count90 days, or the federal period if longer1 week of pay per full year of service, plus 4 weeks of pay if notice was shortThe severance and the 4 weeks; a suit in Superior Court; a waiver needs approval by the Commissioner or a courtApril 10, 2023N.J.S.A. 34:21-1 et seq.
    New York50 or more full-time employees in the state; a closing that affects 25 or more, a mass layoff of 25 or more (at least 33% of the site), or 250 or more90 daysNoneBack wages and benefits, and a civil penaltyText as revised April 2, 2021N.Y. Lab. Law § 860-B
    OhioOhio WARN law (R.C. 4113.31); details not checked for this page60 days (federal rule shown)Not checked for this pageNot checked for this pageNot checked for this pageOhio Rev. Code § 4113.31
    Tennessee50 to 99 full-time employees; a cut of 50 or more within three months (closure, relocation over 50 miles and others)No set period: employees first, then a call to the Labor CommissionerNoneNo penalty in the lawJuly 1, 1988; 50 to 99 range from May 29, 1989Tenn. Code Ann. §§ 50-1-601 to 50-1-604
    Vermont50 or more employees (part-timers at 1,040 hours a year); 50 or more jobs lost in 90 days30 days to employees, the town and the union; 45 days to the stateNone if notice is on time; late notice: 1 day of pay per day missed, up to 10 days, plus up to 1 month of coverage$500 a day; the severance aboveJanuary 15, 2015; § 415 amended July 1, 202421 V.S.A. §§ 411–418, 413(b), 415, 417
    WashingtonA closure that affects 50 or more full-time employees at a site; a mass layoff of 500, or of 50 when it is 33% of the workforce60 daysNoneBack pay at the higher of the final or 3-year average rate, and benefits, for up to 60 days; up to $500 a day; a suit within 3 yearsJuly 27, 2025; amended by SB 6106, signed March 17, 2026RCW 49.45
    Wisconsin50 or more people employed in the state; a closing that affects 25 or more, or a mass layoff of 25% or 25, whichever is greater, or 50060 daysNoneBack pay and benefits for up to 60 days; a complaint to the Equal Rights Division within 300 daysChecked October 21, 2026Wis. Stat. § 109.07
    The layoff
    New Jersey: 6 full years at $1,500 a weekA mass layoff at an employer with 100 or more employees.
    Statutory severance
    $9,0001 week of pay × 6 full years = 6 × $1,500.
    If notice was under 90 days
    + $6,0004 more weeks of pay: 4 × $1,500. Total: $15,000.
    The same worker in Maine
    $9,0001 week's pay × 6 years at a covered closing, because she worked there at least 3 years; due within one regular pay period after her last full day.
    Tip. New Jersey's severance cannot simply be signed away. A waiver of it is not effective without approval by the Commissioner of Labor and Workforce Development or a court. If a New Jersey agreement in a covered layoff offers less than 1 week of pay per full year, ask about it in writing. N.J.S.A. 34:21-2(e)

    Is severance taxed, and does it affect unemployment?

    Severance is taxable wages. The IRS says you must include severance pay in income, and it is subject to Social Security and Medicare taxes and to income tax withholding. In 2026 that means 6.2% Social Security tax on wages up to $184,500, and 1.45% Medicare tax. IRS Publication 525 · Publication 15 (2026)

    • Withholding is often a flat 22%, not your final tax. Severance is a supplemental wage. When it is paid separately from regular pay, the employer may withhold federal income tax at a flat 22%, or 37% on supplemental wages above $1 million in a year. That is withholding only: your actual tax depends on your total income for the year and is settled on your return.IRS Publication 15 (2026), section 7
    • Unemployment: each state decides. States treat severance differently when you claim unemployment benefits. Report it when you apply, and if a claim is denied, you can appeal.EDD TPU 460.35 · NY DOL · TWC
    StateDoes severance affect unemployment benefits?Source
    CaliforniaNo: severance pay is not wages for unemployment insurance purposes.EDD Benefit Determination Guide, TPU 460.35 (Unemp. Ins. Code § 1265)
    New YorkYou are not eligible while weekly severance, or a lump sum spread over weeks, is more than the maximum benefit rate ($869 a week since October 6, 2025) and the first payment came within 30 days of your last day. If the first payment comes more than 30 days later, it does not block benefits. Call the Telephone Claims Center right away if severance starts within 30 days.NY DOL: Dismissal/severance pay FAQ; Maximum benefit rate
    TexasBenefits are delayed, not lost, for the weeks severance covers, when the severance was promised in advance, as in a policy or offer letter. A payment for signing a release, or under a negotiated contract, does not affect benefits.Texas Unemployment Compensation Act § 207.049 · TWC
    Tip. The form of payment can matter. The EEOC's sample agreement lets you take severance as a lump sum or spread over a number of weeks. In New York and Texas that choice can change when unemployment benefits start, so ask the state agency before you choose. EEOC Q&A · NY DOL · TWC

    How to negotiate a severance package

    The EEOC's checklist for employees offered a severance agreement is the best map, and it starts with the calendar. Most of what you can ask for is in the agreement's own paragraphs: the end date, the payments, benefits, references and the release. EEOC Q&A, Appendix A

    1. Check the deadline the moment you get it. Write down the date you received the final offer. If you are 40 or older, you have at least 21 days, or 45 days in a group program. If you are being rushed, the EEOC says to ask for more time and to put the request in writing: the letter below does that.
    2. Ask for the documents. The severance plan or written policy the offer is based on, if there is one; in a group program, the written list of who was selected and their ages; your final pay date and accrued pay; and the date your health coverage ends. See COBRA continuation coverage.
    3. Have the agreement reviewed early. The EEOC suggests an attorney review even if you are leaving on good terms, and warns not to wait until the last day before the deadline. Bar referral services and legal aid are listed at find a lawyer or legal aid.
    4. Know what you are giving up. List any claims you may have, such as discrimination, retaliation or wrongful termination and unpaid wages. The release is what the employer is paying for, so its scope is part of the bargain.
    5. Ask for better terms, in writing. Common requests follow the agreement's own paragraphs: more weeks of pay, a lump sum or payments over time, health premiums for the months the severance covers, a neutral reference, a different end date, and a release that leaves out the claims the law does not let you waive. Ask for a written answer within 7 or 10 days, well before your deadline.
    6. Get every change into the agreement. If the employer makes a material change to the final offer, the 21 or 45 days start over, unless you both agree they do not. Read the final version before you sign, and remember the 7 days to revoke.

    “This is our standard package. We need it signed by Friday.”

    If you are 40 or older, you can say: “I'm over 40, and the law gives me at least 21 days from your final offer to consider it. I'll get back to you well before then.”

    “Everyone gets the same offer. There's nothing to negotiate.”

    You can say: “I understand. I'd still like to ask about a few terms in writing, and I'd appreciate a written answer.”

    “If you sign today, we can process the payment faster.”

    You can say: “Thank you. I'd rather use the time I have to review it. Is the offer the same if I sign later?”

    “We can't share who else was let go.”

    If you are 40 or older, you can say: “If this is a group program and the agreement waives age claims, the law requires that list in writing. Could you send it with the agreement?”

    “You're lucky to get anything. We don't have to pay severance.”

    You can say: “I know severance isn't required by federal law. The agreement asks me to release my claims, so I want the terms to be fair before I sign.”

    Tip. Mind the other clocks. Negotiating does not stop the EEOC charge deadline (180 days from the act, 300 days in many states) or your state's deadline to claim unpaid wages. If you are asking for money you believe you are owed, a demand letter is the formal next step. EEOC: How to file a charge

    Letter generator · 2 letter types

    Ask for time, the documents and better terms

    Built on the EEOC's checklist for employees offered a severance agreement: polite, in writing, specific · checked Oct 21, 2026

    Which letter?

    Ask for an answer within

    Pick the letter, then fill in the names and what you are asking for.

      Rehearse the conversationHow to negotiate, step by step
      Each rule comes from the official source linked in the result. It runs on your device: nothing you type is stored or sent. General information, not legal advice.
      What to do next
      If…What to doGood to know
      You are 40 or older and were given less than 21 days (or 45 days in a group program)Remind the employer in writing that the law requires at least that long; the letter above does it.Without it, the waiver of your age claims is not knowing and voluntary. 29 U.S.C. § 626(f)(1)(F)
      You signed and changed your mindRevoke in writing within 7 days of signing, by the method the agreement gives, and keep proof of delivery.The 7 days cannot be shortened. 29 C.F.R. § 1625.22(e)(5)
      You think you were let go because of age, race, sex, disability or another protected reasonTalk to a lawyer before signing, and note the EEOC deadline: 180 days, or 300 days in many states. EEOC: 1-800-669-4000.See the EEOC charge deadline.
      Your employer's severance plan or policy was not paidAsk for the plan document and a written answer; if it is a benefit plan, call EBSA at (866) 444-3272.In Texas, severance is owed under the Payday Law only if a written policy promises it.
      A covered layoff came with less notice than the law requiresFederal WARN: a suit in federal district court. Illinois: a complaint to the Department of Labor. Wisconsin: a complaint to the Equal Rights Division within 300 days. Washington: a suit within 3 years. New Jersey: a suit in Superior Court.Check your state's row in the table above; a release you sign may cover WARN claims too.
      You are losing your health coverageRead the COBRA election notice and its deadline.See the COBRA deadlines. The agreement should not release your COBRA rights.
      You are out of workApply for unemployment benefits right away and report the severance.If you are denied, see unemployment appeal.
      For the rest of your rights when a job ends, the Work and wages guide lists every topic and agency.
      Getting help
      A severance agreement is a contract with your legal claims inside it. An employment lawyer or a legal aid office can read it with you before your deadline; the pages below cover the claims it may release.
      Find a lawyer or free legal aidLegal aid and state bar referral services, with first-consultation prices.Wrongful terminationWhen a firing is illegal, and the deadline for each agency.Filing an EEOC discrimination chargeThe 180-day and 300-day deadlines, and how to file.Your final paycheckWhen your last pay is due, with or without severance.Demand letterHow to ask in writing for money you are owed, with a letter generator.
      Common questions
      Is severance pay required by law?
      Not by federal law: the Fair Labor Standards Act has no severance requirement. It is owed when a contract, a written policy or a plan promises it, and by statute in New Jersey (1 week of pay per full year of service in a covered mass layoff) and Maine (1 week's pay per year, after 3 years, at a covered closing or mass layoff).
      Is severance pay the same as separation pay?
      In practice, yes. The EEOC notes that a severance agreement is sometimes called a separation or termination agreement. What matters is what the document pays and which claims it asks you to release.
      What is typical severance when you're fired?
      No law sets a typical amount. The Department of Labor says severance is usually based on length of employment, and the EEOC's sample agreement pays a number of weeks of pay. The two state formulas on this page, New Jersey's and Maine's, pay 1 week per year of service.
      How is a severance package calculated?
      By your employer's plan, policy or offer, often as weeks of pay per year of service. For New Jersey's statutory severance, multiply your weekly pay by your full years of service: $1,500 × 6 = $9,000, at the higher of your 3-year average and final regular rate. The calculator at the top of this page does it with your numbers.
      Is severance pay taxed at 40%?
      No. Severance is taxed as wages. When it is paid separately, employers often withhold federal income tax at a flat 22% (37% above $1 million), plus 6.2% Social Security and 1.45% Medicare tax. Your actual income tax depends on your total income for the year.
      What is the 70 rule for severance?
      No federal law, and none of the state laws on this page, has a “70 rule”. If your employer's plan or policy uses a formula with that name, the plan document defines it: ask for a copy, and contact EBSA at (866) 444-3272 if a plan's benefits were not paid.
      How long do I have to sign a severance agreement?
      If you are 40 or older and it waives age claims, at least 21 days from the final offer, or 45 days in a group program, then 7 days to revoke after you sign. Otherwise, the deadline is whatever the offer says; ask for more time in writing if you need it.
      Can I collect unemployment if I get severance?
      Often, but the timing depends on your state. California does not count severance as wages. New York holds benefits while weekly severance is above $869 and the first payment came within 30 days. Texas delays benefits for the weeks pre-promised severance covers. See unemployment benefits.
      How do I negotiate a severance package?
      In writing, early, and paragraph by paragraph: ask for time and the documents first, then for more weeks of pay, health premiums, a neutral reference or a different end date. A material change to the offer restarts the 21 or 45 days unless you agree it does not. See how to negotiate and practise the conversation with the AI mediator on this page.
      When is severance pay due?
      When your agreement, policy or plan says. In Maine, statutory severance is due within one regular pay period after your last full day of work. If you are 40 or older, the agreement does not take effect until the 7 days to revoke have passed.
      Official sources
      1. U.S. Department of Labor: Severance pay (no requirement in the FLSA; a matter of agreement; EBSA) dol.gov
      2. Employee Benefits Security Administration: Ask EBSA ((866) 444-3272) dol.gov
      3. 29 U.S.C. § 626(f): waivers of age claims (21 days, 45 days, 7 days, the group disclosures, EEOC charges) govinfo.gov
      4. 29 C.F.R. § 1625.22: waivers under the ADEA (final offer, material changes, the 7 days, signing early, programs) govinfo.gov
      5. 29 C.F.R. § 1625.23: no tender back of the severance to challenge an age waiver govinfo.gov
      6. 29 U.S.C. § 631(a): the ADEA protects individuals at least 40 years of age govinfo.gov
      7. 29 U.S.C. § 630(b): an ADEA employer has 20 or more employees govinfo.gov
      8. EEOC: Understanding waivers of discrimination claims in employee severance agreements (Q&A and employee checklist) eeoc.gov
      9. EEOC: How to file a charge (180 days, 300 days; 1-800-669-4000) eeoc.gov
      10. 29 U.S.C. § 2101: WARN definitions (100 employees, 50 employees, 33%, 500, part-time employees) govinfo.gov
      11. 29 U.S.C. § 2102: 60 days' written notice and its exceptions govinfo.gov
      12. 29 U.S.C. § 2104: back pay and benefits for up to 60 days; $500 a day; federal district court govinfo.gov
      13. U.S. Department of Labor, Employment and Training Administration: WARN Act dol.gov
      14. DOL: Worker's Guide to Advance Notice of Closings and Layoffs (effective February 4, 1989; pay in place of notice; severance and WARN) dol.gov
      15. IRS Publication 525: severance pay is income, subject to Social Security, Medicare and withholding irs.gov
      16. IRS Publication 15 (2026): 6.2%, $184,500, 1.45%; supplemental wages withheld at 22% (37% above $1 million) irs.gov
      17. California EDD, TPU 460.35: severance pay is not wages for unemployment insurance edd.ca.gov
      18. New York State Department of Labor: Dismissal/severance pay and pensions FAQ (the maximum benefit rate, 30 days) dol.ny.gov
      19. New York State Department of Labor: Maximum benefit rate ($869 a week since October 6, 2025) dol.ny.gov
      20. Texas Workforce Commission, Texas Guidebook for Employers: Final pay, severance benefits (written policy; § 207.049) efte.twc.texas.gov
      21. California EDD: WARN (75 employees, 60 days, $500 a day, Labor Code §§ 1400.5, 1401, 1403; SB 617 for 2026) edd.ca.gov
      22. California Labor Commissioner: Cal-WARN (Labor Code sections 1400-1408) dir.ca.gov
      23. Hawaii DLIR: Notice to the Director (chapter 394B, HRS: 60 calendar days to each employee and the Director) labor.hawaii.gov
      24. Hawaii DLIR: Dislocated Workers Act notice to employees (50 persons; allowance for up to 4 weeks) labor.hawaii.gov
      25. Hawaii DLIR Workforce Development Council: The WARN Act (HRS § 394B, HAR § 12-506) labor.hawaii.gov
      26. Illinois Department of Labor: WARN (75 full-time employees, 60 days, $500 a day, 820 ILCS 65) labor.illinois.gov
      27. Illinois DCEO: WARN (mass layoff of 25 or more if one-third, or 250 or more) dceo.illinois.gov
      28. Iowa Workforce Development: Iowa WARN (25 employees, 30 calendar days) workforce.iowa.gov
      29. Maine Revised Statutes, 26 M.R.S. § 625-B: severance pay at a closing or mass layoff (100 persons, 3 years, 90 days) legislature.maine.gov
      30. Maryland Department of Labor: Economic Stabilization Act (60 days; 50 employees; 25% or 15; regulations effective October 13, 2025) labor.maryland.gov
      31. N.J.S.A. 34:21-1 et seq., as amended effective April 10, 2023 (90 days; 1 week per full year; 4 weeks; waiver approval) nj.gov
      32. Business.NJ.gov: Important updates to employee rights under New Jersey WARN law (April 10, 2023) business.nj.gov
      33. New York State Department of Labor: WARN (50 full-time employees, 90 days) dol.ny.gov
      34. N.Y. Labor Law § 860-B: ninety days' written notice nysenate.gov
      35. Washington Employment Security Department: WARN requirements (RCW 49.45; $500 a day; back pay up to 60 days; 3 years to sue) esd.wa.gov
      36. Washington ESD: Washington state expands federal WARN Act requirements (as of July 27, 2025) esd.wa.gov
      37. Washington ESD: SB 6106 signed March 17, 2026 esd.wa.gov
      38. Wisconsin DWD, Equal Rights Division: Business closing or mass layoff notice (50 persons, 60 days, 300 days; Wis. Stat. § 109.07) dwd.wisconsin.gov
      39. Public Act 26-15, An Act Concerning Online Safety (SB 5) Connecticut General Assembly
      40. Conn. Gen. Stat. chapter 557 Connecticut General Assembly
      41. CT DOL: Worker Adjustment and Retraining Notification Act (WARN) Connecticut Department of Labor
      42. Delaware Code Title 19, Chapter 19, Delaware Worker Adjustment and Retraining Notification Act Delaware Code Online (Delaware General Assembly)
      43. HB 409 bill text Delaware General Assembly
      44. HB 409 bill detail Delaware General Assembly
      45. Employer's Guide to Unemployment Insurance (DUA; mentions 2023 rates and 2024-2025 system changes) Massachusetts Department of Unemployment Assistance
      46. Submit a WARN notice MassHire Department of Career Services
      47. 2025 Minnesota Statutes § 116L.976 Minnesota Office of the Revisor of Statutes
      48. NHES WARN employer card (2024, file name says 'draft v2') New Hampshire Employment Security
      49. Ohio WARN Notice Requirements & Forms Ohio Department of Job and Family Services
      50. WARN Act Technical Assistance Guide (reproduces T.C.A. 50-1-601 to -604) Tennessee Department of Labor and Workforce Development
      51. 21 V.S.A. chapter 5, subchapter 3A, Notice of Potential Layoffs Act Vermont General Assembly
      52. LEO: Worker Adjustment and Retraining Notification Act (WARN) Michigan Department of Labor and Economic Opportunity
      53. S.C. Code Title 41, Chapter 1 South Carolina Legislature
      54. Worker Adjustment and Retraining Notification (WARN) Kansas Department of Commerce
      55. Worker Adjustment And Retraining Notification (WARN) Rhode Island Department of Labor and Training
      56. WARN requirements Pennsylvania Department of Labor & Industry
      57. WARN Oregon Higher Education Coordinating Commission, Office of Workforce Investments
      58. How to Submit Layoff, Reduction in Force, or WARNs to the District of Columbia DC Department of Employment Services
      59. WARN Notices Virginia Works
      Your rightsWrongful termination: when firing is illegalYour rightsYour final paycheck when you leave or lose a jobHow toDiscrimination at work: how to file an EEOC complaint (charge)How toUnemployment benefits: how to apply, and how to appeal a denialYour rightsCOBRA insurance: how it works, how long it lasts and what it costsYour rightsUnemployment Benefits by State: How Much You Get and for How Long
      This page explains the law in general terms. It is not legal advice about your situation. Justice is not a law firm and is not affiliated with any court or government agency.
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