Unemployment Severance Pay

Employers are not required by law to provide recently terminated workers unemployment severance pay according to any federal law. However, if there are terms in an employment agreement, company manual, company handbook, or internal memos that denote a standard operating procedure for issuing severance pay to terminated workers, you may be legally entitled to receive this. Keep in mind that employees generally fired for criminal acts in the workplace or gross misconduct are often exempted from severance pay regardless of their prior arrangements. In addition, if another employee in a similar position to you was terminated and received some form of severance pay, you probably are entitled to a similar package of severance pay if your duties and tenure of service were similar. Even verbal insinuations and exchanges implying that severance is standard for unemployed workers may constitute an implied contract, which is enforceable in the courts.

Fast Facts

  • Most companies issue workers severance pay with waivers, known as waiver of right to sue, which essentially gives them a severance pay amount in exchange for legally giving up their right to sue their former employer down the road

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