Written & reviewed by NotALawyer Review AI · Updated June 26, 2026
Severance is money or benefits an employer offers when your job ends — but in most situations, no law requires it. When it is offered, it almost always comes with a written agreement, and that agreement typically asks you to give up (release) your right to sue over the employment. You generally don't have to sign, but signing is usually what unlocks the payment. Reading it carefully, or having a licensed attorney in your state review it, before you decide is the norm.
Outside of a specific contract, union agreement, or company policy promising it, federal law generally doesn't force an employer to pay severance. Some large layoffs trigger advance-notice rules, but notice and severance pay aren't the same thing. What you're offered is often negotiable rather than fixed.
In exchange for the money, most severance agreements ask you to waive legal claims against the employer — things like discrimination or wrongful-termination claims. That trade is what the document is built around, which is why it's worth understanding exactly what you'd be giving up before signing.
Under the federal Older Workers Benefit Protection Act, a waiver of age-discrimination claims must meet specific conditions — including giving workers 40 and older a period to consider the agreement (often 21 days) and a window to revoke after signing (typically 7 days). Those timeframes are set by federal law, not the employer's goodwill.
An offer with a signing deadline doesn't always mean you have to sign on the spot. People commonly use the review window to read the release language, ask about the payment terms, or have a licensed attorney in their state look it over. Once signed and not revoked, releases are generally hard to undo.
Say a 55-year-old is offered eight weeks' pay to sign. Because of their age, the OWBPA conditions apply, so the agreement should give them time to consider it and a short window to back out. The eight weeks is the benefit; the released claims are the cost — weighing the two is the decision.
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