Legally, an employer is not entitled to provide severance plans; however, many employers have severance plans as part of their employment package. If this is the case, then the employer must follow the written rules regarding the severance plan, otherwise an employee has the legal right to pursue the severance in court. With most severance plans, the employee will require the employer to accept the plan with the condition that they will not seek any further legal action, such as unlawful termination, against the employer. As for severance pay, it is the law that employers must provide compensation for accrued overtime and sick days, payment for hours you have worked, commissions earned and handle (at your expense) extended health benefits to cover you after termination. Often times, a company will make an offer to an employee; it is up to the employee to carefully read the offer before signing anything.