how to get severance pay when you’re fired or laid off

by Alison Green on January 23, 2024

If you’re fired or laid off, can you expect or negotiate severance pay? What about if you’re resigning? You probably know that severance pay is an option in some situations, but you might not know when gets it, when, why, or how to take full advantage of your options.

At New York Magazine today, I’ve written a guide to the the most common questions people have about severance pay and how to get it. Head over there to read it.

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  1. anotherfan*

    Absolutely read the fine print, although when you’re laid off, desperation may make you move faster than you should. I was laid off during a general nationwide cleansing of the company I was at for 25 years and although the severance was reasonable for me if not for shorter-term staff — one week for every year worked — it disappeared as soon as I got another job. I was given the philosophical choice of taking all 25 weeks and then looking for a job or taking a job as soon as I got one and forego the rest of my “severance.” I was not expecting that to be a choice I would have to make.

    1. Happy meal with extra happy*

      I don’t think that’s inherently unreasonable, and it’s relatively common. Severance isn’t necessarily supposed to be a windfall for the person laid off, but rather funds to tide you over until you find a new job. Also, it’s not like some unemployment requirements, where in those scenarios, you’re expected to be much less picky about what jobs you take.

    2. anecdata*

      That’s the only way I’ve seen it (in the US) – severance stops when you start a new job – and I don’t think you’d have any luck pushing back on it, if that makes you feel any better about not noticing it

      1. ThatGirl*

        Granted, I’ve only had severance paid out for a much shorter amount of time, but the last time I was laid off I got a new job pretty fast and I don’t recall any stipulations about not getting the full severance.

      2. Nynaeve*

        I got severance last year after being laid off when the contract was restructured. My severance was a lump sum, for 10 weeks (1 per year of service) and I was only required to pay it back (prorated) if I came back to work at the company that laid me off (on a different contract). If/when I got a job somewhere else, the severance was mine to keep. This was in the US and the company in question holds multiple Federal contracts.

      3. New Mom (of 1 5/9)*

        Wait, how does that work? How would they even know you got a new job? I’ve never been laid off and I assumed severance was paid directly from your old employer.

        1. Happy meal with extra happy*

          There’s probably an agreement in the contract that you notify them if you get a new job. If you don’t, it’s a breach of contract, and you’ll owe some type of damages. So, you run the risk of them finding out you got a new job (LinkedIn, other social media, word of mouth) if you don’t notify them.

        2. anotherfan*

          In our case, we were required to apply for unemployment and the company paid the difference between what unemployment paid and what our former salary was. So as soon as the unemployment ended, so did the severance. I will say that people who took a buyout or were laid off at other times got a difference severance package. This was just this particular layoff, which made it more of a disconnect to what other coworkers had received.

      4. Perfectly Cromulent Name*

        Not necessary. My husband was laid off in a mass layoff event in November, and his severance was a lump sum. He miraculously managed to find a new job almost right away, but he did not have to pay back the severance. Unemployment is a different story- he could only claim unemployment until his new job started.

  2. Anon today*

    This is quite timely, as there’s been a round of layoffs at my employer today and I’m still waiting to find out whether I’m included. Thank you!

    2. Lady_Lessa*

      I’m hoping for the best for you. Even if you survive, its rough. I’ve been in both situations.

  3. Mellie Bellie*

    I couldn’t access the article (sorry!!) and I’m sure Alison covered it, but to reiterate: get an employment lawyer (not just a general any kind of lawyer) to review any documents you must sign prior to accepting the severance pay. Most of the time you will be releasing all sorts of potential claims against the company. And, while the vast majority of the time, that’s fine, it’s a good idea to fully know the legal ramifications of what you’re signing away.

    1. I Have RBF*

      Yes, read carefully, preferably with a lawyer. If there are any questionable items, think carefully about whether it makes economic sense for you to sign on to the questionable items.

    2. Lurker*

      When I was on the HR side of things, we had to terminate someone (it was their first post-college job) and gave them a Separation Agreement. The employee tried to sign it and return it to me by the end of the day and I told them they had to take it home overnight and really read it before they could give it to me. The Agreement was above board, but I know when you get fired or laid off you’re kind of in shock, so I wanted them to take a little time before signing it.

      1. anecdata*

        That’s really thoughtful of you

        Our company tells people the severance-in-exhange-for-legal-release offer is only available right now, so you either sign it (2 minutes after hearing your role is eliminated), or they’ll threaten you risk getting nothing. Unsurprisingly, most people sign it.

  4. Dawn*

    The one that I’m having to figure out now (rather unexpectedly) is if I’m going to be able to negotiate for a title bump before we completely shut down.

    I’m less concerned about severance than I am about having my title adjusted to what it really should have been for the past year.

    1. Busy Middle Manager*

      Curious what industry you are in? I do data analytics stuff and have been lightly job hunting and I feel like no one cares about a bunch of stuff that used to be important, in particular, titles or many soft skills (for example they want to know if you can use a software but don’t ask/care if you’ve ever actually made an impact in any way via using it). Just curious if this is going on in other areas.

      1. Dawn*

        Broadly speaking, I work in a retail corporation’s customer service department, but on like an upper level of that (just not an officially-acknowledged one.) I’m listed with a lower-end title – think something like “Customer Service Representative” – but in practice I’m one of the few people in my company authorized to represent the company on all social media platforms, and I’d like my exit title to reflect the work I’ve been doing for the past year. My director had been working on it before this bomb got dropped on us.

        1. econobiker*

          As long as you have a former manager or former coworkers who wpi;d vouch for your improved title, even if you do not actually get that title from the company, you can probably list the title once you have separated. Nothing wrong with even listing it now in parenthesis like maybe such as:

          Dawn Somebody
          Customer Service Representative (Social Media Manager)
          XYZ Retail Company, Inc.

          Understandable that that version is not as much credibility as the direct Social Media Manager title but at least it represents what you are doing so you can expand on your experience to in job interviews.

          1. econobiker*

            I wrote that above because I was an product engineer at a truck parts company but became the defacto “Technical Service Manager” in dealing with customer technical questions about installation and applications. Our sales order takers (customer service representatives) did not have mechanical expertise to field customer technical questions. I ended spending approximately 20% of my time fielding calls and emails from our field sales people, inside sales customer service reps, and customers directly including travel to customer truck dealerships on occasion for escalated problem solving of installation issues.

            My resume titles ended up being as this:

            Econo Biker
            Product and Manufacturing Engineer; Technical Service Manager
            ABC Big Truck Parts Company, INC.

            So I could expand on my direct customer interaction and customer service not just working on product designs and manufacturing. No one at all ever formally gave me the Technical Service Manager title but that is what I was so I claimed it.

            1. Dawn*

              I’ve got something like that now, but I list the “team” I was heading in parenthesis rather than the assumed position.

              The trick here is that our parent company will still be around and their HR will likely still be contacted to verify employment and job title.

              I have so many people who will vouch for the position I should have had, but I can’t really claim it’s actually mine… yet.

    2. anecdata*

      Honestly if you’re at a startup, and you’re likely to completely shut down – I would straight up tell the founder/my boss that I wanted X title for JobSearch reasons in case we shut down. Frame it as something that’ll make you more able to stay through the end/through the risky time

      I wouldn’t do this at a big company with more beauracracy though

      2. Dawn*

        Oh by the way, that’s exactly what I was telling my director before the layoffs were announced, because other parts of the parent company had already experienced layoffs. I’m just planning on doubling down on it now that we explicitly are being laid off.

        1. anecdata*

          Oh yeah, that’s tougher because it’s very likely your boss needs someone else’s sign off to make it happen, and if your whole dept is getting cut, corporate knows your boss doesn’t have the leverage to make it happen.

          1. Dawn*

            Right, yes, but

            They’re more than likely going to want me to stay through to the very end of shutdown, and that gives me some room to negotiate.

            I’m sure they’ll have a severance offer tied to that as well, but if they want me to hold my job search for the next 6-10 months, well, this is what I’m pushing for to make that promise.

  5. Dasein9 (he/him)*

    Thank you. This is important information. Next time I’m in negotiations, I plan to bring up severance pay and benefits.

  6. An Australian In London*

    The company’s offer should always be compared to the minimum required by law in that jurisdiction. Expect shenanigans.

    I was once offered severance that did not meet the minimum’s required by law in my state. They countered that there was no *contractual* obligation to pay more.

    Strictly speaking they were correct: the obligation arose not under contract but under legislation. I pointed this out. They countered that there was no such legislation in the state of registered company HQ.

    Strictly speaking they were correct again. I had to remind them of my original letter of offer which among other things specified that my employment was governed by the law of the state of the office I worked in.

    They tried a couple more rounds of weaselling before they have up and paid what they had to.

    1. Ask a Manager* Post author

      To clarify, no law in the U.S. requires severance. You might have been covered by the WARN Act, which in large-scale layoffs requires at least 60 days’ notice of the layoff. If the company doesn’t give you that notice, the law requires it to pay you for up to 60 days after the layoff (which might be the amount of legally required severance you are talking about here).

      1. Aussie worker*

        I think he might be talking about Australian states – going by his name ‘An Australian in London’. Severance pay can be legally required here. We have much better work place protections here. It’s a real eye opener reading your column. Ironically, I have just been laid off this month as all of our work is being offshored to the United States where it will be done for significantly lower wages.

      2. Freya*

        Australian law can and does, unless certain exceptions apply (such as the ex-employee was a casual worker or the employer had 15 or fewer employees or the ex-employee was terminated for serious misconduct as defined by Fair Work Australia). Contracts are not allowed to, on balance, leave the worker worse off than they would be under law without a contract.

        When employment is terminated in Australia, the ex-employee gets their accrued but untaken annual leave and long service leave paid out, and if applicable gets redundancy pay in a lump sum based on length of continuous service. This can be modified by the Award an employee is covered by (Awards are basically industry-wide minimum conditions of employment) and any Enterprise Bargaining Agreement (like an Award, but for a business; must be at least as good, on balance, for the employee as the relevant Award) but accrued leave and applicable redundancy is the minimum.

        1. Freya*

          To look up the current entitlements, go to the Fair Work Australia website: https://www.fairwork.gov.au/ending-employment/redundancy/redundancy-pay-and-entitlements

          The current minimum redundancy pay under the National Employment Standards is:
          1-2 yrs service: 4 wks pay
          2-3 yrs service: 6 wks pay
          3-4 yrs service: 7 wks pay
          4-5 yrs service: 8 wks pay
          5-6 yrs service: 10 wks pay
          6-7 yrs service: 11 wks pay
          7-8 yrs service: 13 wks pay
          8-9 yrs service: 14 wks pay
          9-10 yrs service: 16 wks pay
          10+ yrs service: 12 wks pay – this is less because of long service leave kicking in

          These details can also be found in the Fair Work Act 2009 (Cwth)

  7. Busy Middle Manager*

    I need to study this. My job has basically imploded and it’s time to leave. You know it’s just time. But my company is pretending everything is fine. I’m not just going to quit but can’t work and do all of my personal obligations and job hunt. I wish companies were more forthcoming when things weren’t working and would pay you something to get you out the door instead of dragging it out until the person leaves.

  8. RH in CT*

    I worked for the same company – sort of – for 28 years. The qualifier is because it had six different owners over those years. The last transition was by one of the most paternalistic companies in existence, and the company they bought had a long and proud history. As part of the acquisition a very generous package was negotiated as part of the deal for anyone laid off as a result. While I was not laid off right away, it was deemed to be as a result of the buyout. On top of whatever had been negotiated, my 28 years of service resulted in 96 weeks of severance, with the same medical insurance and pay. (I can tell you that a 96 week vacation is something you can really get used to.) At the end of that I “retired” from the company being acquired; the negative side to that was a much smaller pension payment, while the positive was the money starting right away, and more significantly I was able to start on retirement medical coverage immediately. A great deal. More than 15 years later I’m still on that medical plan and very grateful for it.

    I did a bit of consulting for a year or so, then quite working in my mid-50’s.

    1. Magpie*

      That’s really nice that they paid out so much severance! When my husband was laid off a few years ago, they capped the “years of service” payout at 10 years, so the max they would pay to anyone was 20 weeks worth of salary, even people who had been there 25+ years.

      1. Retired Vulcan Raises 1 Grey Eyebrow*

        FinalJob paid 1 month/ year service (after the only layoffs ever in 2008, which were also voluntary) but a couple of senior managers who’d been there 20+ years consequently received huge payments.

        So for future redundancies the Works Council agreed to set a cap of xxxkEuro per person rather than capping years. Seems more egalitarian.

  9. ThatGirl*

    I’ve been laid off twice and the severance itself was identical – two weeks of pay for each year I’d been at the company. There were a few other differences, though. At the first company – which was a large Fortune 500 company – I had two choices: I could either apply for an open job in my department (some of which I was vaguely qualified for, but none I was really interested in) and if they didn’t hire me for that then I could get the severance, OR I could sign the paper, get the severance right away, and – this is the key – I could never apply to work for that company again without express permission from the CEO.

    I still find that kind of wild – never? ever? I couldn’t even do freelance work for them. Really makes me wonder what happened that that became a rule.

    Meanwhile at the second company I was told that I very much was eligible to be rehired for a different job, and that if I was rehired within a year I would retain my seniority.

    1. Retired Vulcan Raises 1 Grey Eyebrow*

      Very odd severance requirement at the first company. Did they maybe use layoffs and then not rehiring for the post rather than firing people for performance/conduct?

    2. doreen*

      That first one almost seems like a cross between a layoff and a buyout. I’ve only really seen buyouts in unionized jobs but the payments are often called “severance” and there is often a restriction on rehiring ( I just missed out on one. I changed jobs in January 1994 and in March my previous employer announced a buyout which would have gotten me an approximately $10K payment. If I had known it was coming , I would have tried to adjust my start date at the new job. But if I had returned to work at my former employer within a certain number of years, I would have had to pay back the money. )

  10. I Need Tea Now!*

    I am Canadian and when this happened to me at Old Job I went to see a lawyer who specialized in this sort of thing.

    My severance package included one year’s salary plus benefits and my annual bonus (which was pro-rated), so it was pretty generous to begin with but the lawyer said you can always ask for more and do it in writing. He said the language to use when asking is “I require”.

    If they say no you can decide what to do from there but there’s harm in asking for more. I was able to negotiate an extra 3 months on top what they had already offered.

    There was also a no litigation clause, and if I landed another job during my severance period my severance would be reduced by 50% and paid out in a lump sum.

    On a side note, when typing this comment every time I typed severance I typed it as severage, which I think was my brain combining severance and sewage….I guess it’s because it’s a pretty crappy thing to go through, but please know there is life after Old Job.

      1. I*

        Hey Dawn, I’m in Whitby Ontario and the lawyer’s name was Paul McKeever. Not sure if that’s helpful but you can contact the Law Society of Ontario, but if you’re not in Ontario I’m guessing there’s a Law Society website for every province / territory).

  11. Statler von Waldorf*

    As a Canadian HR person, I feel the need to point out that severance is usually handled quite a bit differently up here than it is in the US. Severance is required by law, for the really big one. The specifics vary depending on your province, if you’re in a federally regulated business, and several other factors, but the rule of thumb I’ve heard is two weeks plus one week per year of employment.

    In addition, legal releases are less common. They still happen, but they are usually reserved for more generous severance packages that exceed the minimum required by law. Since the legal obligation to pay severance exists, employers have less leverage here to get an employee to sign a release. When they really want the legal release, they usually make a more generous offer.

    Some things are the same up here is in the US though. If you quit, you don’t qualify for severance, unless you are specifically claiming constructive dismissal. If you are fired for cause, you don’t qualify for severance either. Given that proving someone was fired for cause can be difficult (depending a LOT on the circumstances), many employers simply pay severance rather than deal with the legal risk, but there are exceptions to that and I wouldn’t bet my future on it.

    The one thing that Alison said that I really, really want to echo is that you should NEVER sign a legal release for a severance agreement on the spot. The shadiest legal garbage I’ve ever seen in HR were snuck into severance releases with the idea that the soon-to-be-ex employee will be blinded by the big fat check and not notice them.

    1. I Have RBF*

      The shadiest legal garbage I’ve ever seen in HR were snuck into severance releases with the idea that the soon-to-be-ex employee will be blinded by the big fat check and not notice them.

      This.

      I have seen outright lies, misinformation, and signing away of statutory rights in these agreements. Always read them with a critical eye, and run it by an employment lawyer if you can.

    2. Polyhymnia O’Keefe*

      Given that proving someone was fired for cause can be difficult (depending a LOT on the circumstances), many employers simply pay severance rather than deal with the legal risk

      My workplace went through this recently. It was more important to get the person out of the role than to spend the time proving that they were fired for cause. The hassle, time, and energy were worth the cost in this case.

    3. 2e*

      I don’t think my province actually has a require for severance. Required notice does increase with length of service and there is a provision for pay in lieu of required notice. (Probably would be different from statutory notice requirements in, say, an at-will state? Or maybe basically a difference in terminology?)

      Our labour laws are pretty weak, and I know that worker protections in general are stronger in other places (e.g., BC, ON).

      1. Statler von Waldorf*

        Pay in lieu of notice is another term for severance pay. You could in theory get many months of notice instead of severance pay, but in my 20 years doing HR in Canada I’ve never seen or heard of it happening that way. I’m sure it has happened, but it’s usually not in the employer’s best interests to do so. A lame duck employee is usually not a productive one.

        To the best of my knowledge, every province has a requirement for severance, they just disagree on how much the minimum should be.

        1. 2e*

          Ah, okay! I understood the terms to have different connotations. There are definitely statutory requirements for pay in lieu, scaled to length of service, in my province. (Much lower requirements than some other provinces, but you’re right that there’s a requirement.)

          Thanks for the clarification. :-)

  12. Retired Vulcan Raises 1 Grey Eyebrow*

    Reasonable that there is rarely severance when someone is fired or quits, but I didn’t realise that the US doesn’t have mandatory payouts when a job disappears for business reasons. Yikes, that’s so tough.

    The UK and EU/EEA do legally require payment when somene is made redundant and it doesn’t normally come with a legal release to sign. Not a huge amount though.
    e.g. the UK has legal minimum of 1 week per year employed, 1.5 weeks for those aged over 40. More generous employers in the Uk / Europe give 1 month per year.

    Also, it’s usually a lump sum payment, so you don’t lose out if you get a new job very quickly – is that something that is feasible to negotiate in the US?

    1. Filosofickle*

      Definitely not. I was once laid off on January 31st — no warning, no severance, and because it was the last day of the month I also had no health insurance as of the next day.

      1. MA Dad*

        My final day was on the 3rd of the month (last March) and that was exactly when I lost my health insurance. COBRA is awful :(

    2. WhatSeverance?*

      that sound very generous to me. I’ve gotten no severance for three of my layoffs and two weeks total (flat rate for everyone) at my fourth. I’ve also been laid off from multiple contracts which, of course, comes with no severance.

  13. I Have RBF*

    You might also be offered severance when being fired if the company has a reason for wanting you to sign that release of legal claims — like if your HR department worries you have grounds to sue over something that happened during your employment.

    I was presented with this type of severance agreement in one case. They were firing me for BS reasons, to disguise a layoff so they didn’t have to do WARN Act, and they were targeting all the older workers. I had both witnessed blatant racism and retaliation. I am also a member of at least four protected classes.

    The garbage severance agreement wanted me to say, in writing, that there had been no discrimination or retaliation, plus demanded non-disparagement, secrecy, inability to file with EEOC, and that any class action settlement I would turn back over to them. I did not sign it because of the multiple untruths and distortions in it! This left me free to tell anyone who asked about the agreement.

    I still have a copy somewhere, and I keep meaning to post it somewhere, with commentary about all the BS in it. I hope my lack of signing caused some people a loss of sleep, because even my grandboss at the time said I probably had grounds to sue. (The only reason I didn’t is because I had a new job within two months.)

  14. corporatefuture*

    I’m a lawyer in the employment space, and I will add to the times you might try to negotiate for severance when you were terminated for “performance” reasons: when the circumstances around the termination seem really suspicious and possibly falsified.

    A personal example: My partner got let go from a job they had for only 3 months for “performance reasons” on the same day someone else on the same team was let go, also for “performance.” This was not a sales or other type job where there’s a 90-day probationary period, and the other employee had been there for over a year. I won’t get into all the details, but the performance basis was extremely suspect for several reasons. First, no reasons or explanations for lack of performance were provided to either employee when they terminated, and prior to that both my partner and the other person had never been provided with critical feedback from their manager, despite them both directly asking for it multiple times. Second, the manager had been hired at essentially the same time my partner was–so they didn’t hire anyone on the team themself, except that they hired a close former colleague the same day my partner and someone else were let go–making us think this was possibly a strategic termination based on the manager wanting to build their own team. Third, the company wasn’t performing super well financially, and layoffs were happening broadly in the same field. Fourth, the manager had engaged in just generally gross behavior like openly gossiping about the performance of others and about how they were intentionally politicking certain execs.
    Finally and critically, my partner and their former coworker were in touch, and the coworker shared that they had received severance. Of course, my partner did not. The other employee was of a demographic that made me think the company wanted them to sign a release, perhaps knowing that this whole thing was not above board or done well.

    So – my partner, with my help, negotiated hard for severance. They laid out a detailed account of their experience with their manager (lack of feedback, times they got good feedback, etc. – with screenshots) and that they knew someone else had gotten severance, despite being terminated on the same day for the same alleged reason. And it worked! Unfortunately I think the only thing that likely swayed them was not the totally awful management but instead the differential treatment of their coworker, which essentially allowed my partner to say “your reason for providing severance to one person but not me might be illegal and based on protected class.”

    That’s all to say that if something seems really fishy with your termination and you can vet that fishiness with someone who might be more unbiased (I’m biased towards my partner but I’m also extremely familiar with employment law and best performance management practices), you should just lay out your case for severance in a really clear/direct but also polite and kind fashion and see what happens. Worst that happens is they say no!

  15. Anon for This*

    I was terminated and successfully negotiated severance. After filing a complaint that prompted an investigation and told the results of the investigation were that nothing was amiss at the company, I was terminated less than two months later. In the meeting, they didn’t offer severance so I directly asked where my severance agreement was. (I’m also in two protected classes.) The next day I used my state’s Bar Association to find a labor attorney because if I didn’t get severance I was interested in pursuing a retaliation claim. I ended up with a severance agreement that I was satisfied with; and a new job before I even signed the agreement. There was nothing in my agreement about not receiving severance if I found other employment. I paid the attorney less than $1,000 and it was completely worth it. The attorney helped me get some mutual non disparagement language added as well as a couple of other things.

    1. ecnaseener*

      FWIW, everyone under US law is “in” more than two protected classes — everyone has a race, religion (or lack thereof, still protected), sex, sexual orientation, and national origin, at minimum.

  16. 2e*

    I was offered (minuscule) severance when being terminated for cause.

    Or, more accurately—when being terminated for making a complaint about discrimination.

    It was an astonishing situation: I made an internal complaint and, two days later, was locked out of all company systems and sent home.

    I then contacted the agency that handles discrimination complaints in my jurisdiction (think EEOC). Two days after I notified my employer that I was making the external complaint, they unearthed some “misconduct” in work I’d done a year earlier (which had been reviewed multiple times!) and formally put me on administrative leave. They fired me about a week later.

    The severance offer included a legal release. I wasn’t able to afford a lawyer, but got some advice through a workers’ advocacy organization. They advised that a typical settlement for a case like mine would include substantially more severance *and* damages. (The damages alone would have been slightly more than the severance they initially offered.) My employer rejected my counteroffer.

    Nearly two years later, the discrimination/retaliation case is still being adjudicated.

    I was eligible for unemployment benefits, because I had sufficient documentation to meet their standard for wrongful dismissal. Those benefits have run out.

    If they offered me that severance package again today? I’d be tempted to take it. I hope I wouldn’t, but…

  17. Hamster*

    I guess I’m confused because I’ve never heard of severance in case of a firing, only for a layoff.

    At an earlier job, I was one of dozens laid off due to the events at that time (March 2020). The company did not pay out unused PTO and benefits terminated immediately.

    At previous job, I was let go on Oct 30 due to performance. I was only given my partial paycheck and unused PTO. They were nice enough to extend my benefits to end of Nov instead of terminating 10/31 b/c they owed me unused PTO.

    Both times were sudden, and there was no room for negotiation or conversation, nor did I sign anything.

    Am I wrong to imagine that all cases of firings, they walk you out immediately – no questions, no discussion?

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