# Understanding a severance offer before you sign > 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. - URL: https://explained.page/severance-offer - Language: en - Last checked: 2026-10-29 - Watch the 1-minute animated guide: https://explained.page/watch?start=severance-offer ## Step by step 1. **Got a severance offer?** Don’t sign on the spot. It’s usually money in exchange for giving up rights. Here’s what to check. 2. **Read every part.** Check the amount and timing, any help with health insurance, the rights you give up by signing, and limits like non-compete or confidentiality. 3. **You may have time to think.** 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 after signing. 4. **You can often negotiate.** Politely ask for more weeks of pay, help with health coverage, a good reference, or job search help. Get any changes in writing. 5. **Know what’s owed anyway.** Your final paycheck is owed either way, and some states require paying unused vacation. Severance may affect unemployment timing in some states. 6. **Big layoffs may require notice.** Larger employers doing mass layoffs often must give 60 days’ notice, or pay instead, under the WARN Act. 7. **Consider a lawyer’s review.** If the amount is large, you think the layoff was unfair, or you’re asked to give up a lot, an employment lawyer can review it, often quickly. ## 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 ## 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. ## 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. Source page: https://explained.page/severance-offer/questions/is-my-employer-required-to-offer-severance ### Can I collect unemployment if I take severance? Often yes, though some states delay or reduce benefits while severance is paid. Report it honestly. Source page: https://explained.page/severance-offer/questions/can-i-collect-unemployment-if-i-take-severance ### 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. Source page: https://explained.page/severance-offer/questions/should-i-sign-my-severance-agreement-right-away ### 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. Source page: https://explained.page/severance-offer/questions/can-i-negotiate-a-severance-package ### 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. Source page: https://explained.page/severance-offer/questions/what-is-a-release-of-claims ### 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. Source page: https://explained.page/severance-offer/questions/how-long-do-i-have-to-sign-a-severance-agreement ### Does severance affect unemployment benefits? In some states it can delay or reduce benefits. Report it when you apply. Source page: https://explained.page/severance-offer/questions/does-severance-affect-unemployment-benefits ### What is the WARN Act? A federal law requiring many larger employers to give 60 days’ notice before mass layoffs or plant closings, or pay in place of notice. Source page: https://explained.page/severance-offer/questions/what-is-the-warn-act ## Official sources - [U.S. Department of Labor: severance pay](https://www.dol.gov/) - [U.S. Department of Labor: WARN Act](https://www.dol.gov/agencies/eta/layoffs/warn) - [EEOC: age discrimination and releases](https://www.eeoc.gov/) To find your local office, search for: - "[your state] final paycheck law" - "[your state] unemployment severance pay rules" --- General information, not legal or professional advice. Rules differ by state. From explained.page (www.explained.page). Life’s stuff, explained simply.