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Understanding a severance offer before you sign

What severance agreements include, the rights you give up, review periods for workers 40+, negotiating, what’s owed anyway, and WARN notice.

Quick answer

Don’t sign on the spot. Severance is usually money in exchange for giving up legal claims. Read the amount and timing, any health coverage help, the release of rights, and limits like non-compete or confidentiality. If you’re 40 or older, federal law generally gives you at least 21 days to consider (45 in group layoffs) and 7 days to cancel. You can often negotiate. Your final paycheck is owed either way. Consider a lawyer’s review.

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Your checklist

  • Don’t sign on the spot
  • Read amount, benefits, rights and limits
  • Know your review time if 40+
  • Negotiate politely, in writing
  • Know final pay is owed anyway
  • Consider a lawyer’s review

Rather read it? Here’s the whole thing.

What it is

Severance isn’t generally required by law. It’s usually offered in exchange for signing a release, giving up the right to sue your employer over your job or its end.

Read every part

  • Amount and when it’s paid (lump sum or over time).
  • Help with health coverage, like paid COBRA premiums.
  • The release: which claims you give up.
  • Non-compete, non-solicitation, confidentiality or non-disparagement rules.
  • Return of company property, references, and how the departure will be described.

Time to decide

If you’re 40 or older, federal law generally gives you at least 21 days to consider the agreement (45 days in group layoffs) and 7 days to revoke after signing. Others should still ask for time.

Negotiating

Many employers will consider reasonable requests: more weeks of pay, longer health coverage help, a neutral or positive reference, outplacement help, or flexibility on non-compete terms. Get changes in writing.

Owed anyway

Your final paycheck for work done is owed regardless. Some states require paying out unused vacation. Severance may delay or reduce unemployment benefits in some states.

Mass layoffs

Under the WARN Act, larger employers doing mass layoffs or closings often must give 60 days’ notice or pay in lieu.

Get advice

If the stakes are high or the layoff may have been unfair, an employment lawyer can review the agreement.

Official sources, and where to look

To find your local office, search for:

  • [your state] final paycheck law
  • [your state] unemployment severance pay rules

Pick sites that end in .gov. Official forms are almost always free.

Common questions

Is my employer required to offer severance?

Generally no, unless a contract, policy or union agreement requires it, or in some mass-layoff situations. More ›

Can I collect unemployment if I take severance?

Often yes, though some states delay or reduce benefits while severance is paid. Report it honestly. More ›

Should I sign my severance agreement right away?

No. Take time to read it carefully, and consider having an employment lawyer review it, especially if a lot is at stake. More ›

Can I negotiate a severance package?

Often yes. Polite requests for more pay, health coverage help, a reference or outplacement help are common. Get changes in writing. More ›

What is a release of claims?

The part of a severance agreement where you give up the right to sue your employer over your job or its ending, in exchange for the severance. More ›

How long do I have to sign a severance agreement?

It depends. If you’re 40 or older, federal law generally gives at least 21 days (45 in group layoffs) plus 7 days to revoke. Others should ask for reasonable time. More ›

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Not yet reviewed by an expert. Last checked 2026-10-29. This is general help, not legal, medical or professional advice. Rules are different in every state.