{"id":357804,"date":"2016-04-04T10:45:29","date_gmt":"2016-04-04T15:45:29","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/employment\/losing-a-job\/severance-pay-and-benefits-considerations.html"},"modified":"2025-04-24T10:32:52","modified_gmt":"2025-04-24T15:32:52","slug":"severance-pay-and-benefits-considerations","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/employment\/losing-a-job\/severance-pay-and-benefits-considerations.html","title":{"rendered":"Should You Accept a Severance Package Offer?"},"content":{"rendered":"\n
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Should You Accept a Severance Package Offer?<\/h1>\n
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\n By Balrina Ahluwalia, Esq.<\/a> | Legally reviewed by Laura Temme, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Accepting a severance package usually involves forfeiting certain legal rights, such as suing the employer for employment-related claims. It\u2019s crucial to understand the terms of the severance agreement, which often includes conditions like non-compete and non-disclosure clauses, and possibly affects your eligibility for unemployment benefits. Consulting with an employment attorney can provide insights and help negotiate better terms, ensuring that you make a well-informed decision that aligns with your career and financial needs.<\/p>\n\n <\/div>\n\n

Your soon-to-be former employer just offered you a severance package. Maybe you resigned. Or perhaps your employer initiated the separation<\/a>. All that matters now is that you\u2019ve got a limited time to decide whether to sign the agreement that comes with the severance. There are undoubtedly several benefits to signing it and taking the severance package. However, it\u2019s important you understand that doing so typically means giving up some legal rights.<\/p>\r\n

If you\u2019ve been presented with a severance agreement, consider having a qualified employment attorney <\/a>review it. They can explain its practical implications and potentially help you negotiate better terms.<\/p>\r\n

In this article, we\u2019ll review some of the basics you\u2019ll want to keep in mind as you proceed. But first, let\u2019s review what a severance agreement<\/a> is.<\/p>\r\n

What Is a Severance Agreement?<\/h2>\r\n

A severance agreement is a contract between an employer and an employee who is leaving the company. It generally outlines the conditions under which the employee will receive certain benefits after their employment ends. These benefits usually include a severance payment<\/a> and can include other things as well.<\/p>\r\n

For example, a severance package may include continued health insurance, unused vacation pay, and outplacement services to help the soon-to-be former employee find a new job.<\/p>\r\n

The agreement also often includes terms that will govern the parties upon separation<\/a>. As a result, we often hear the terms \u201cseparation agreement\u201d and \u201cseverance agreement\u201d used interchangeably. You\u2019ll typically need to sign one of these to receive the severance benefits or package.<\/p>\r\n

Signing usually means that you agree not to take legal action against the employer for certain claims related to your employment.<\/p>\r\n

Common Provisions<\/h3>\r\n

A typical severance agreement will include far more terms and conditions besides waiving your right to sue. We frequently see language in these agreements addressing the following areas:<\/p>\r\n