Severance Pay Laws

Severance pay refers to compensation given to employees who lose their jobs due to layoffs or company downsizing. Unlike wages, there are no federal laws requiring employers to offer severance pay. However, if a company has a policy or includes it in an employee contract, they must honor that commitment. Some states may have specific regulations regarding severance. If you receive severance, it might affect unemployment benefits, so it's wise to understand your rights and obligations. Always check your employment agreement and applicable state laws for specific details related to severance pay.