Depending on the applicable facts and circumstances, what is severance pay to some may be thought of as an incentive to others. The United States Department of Labor ("DOL") characterizes severance pay as money paid to employees upon their termination of employment. The amount of severance pay is often calculated based on the length of employment. The Fair Labor Standards Act ("FLSA"), which set forth an employment law guide for things like work hours and employee overtime pay, does not require severance pay in any of its provisions. Since severance pay is an optional benefit provided by an employer, there are no strict guidelines for payment or amount given to an employee. Severance packages are based on an agreement between the employee and employer and may involve the employee waiving rights to file complaints or wrongful termination claims at a later time. Severance pay effectively cuts ties between the employee and employer and is often used to make the departure easier on both parties in the long run.