It also requires certain employers to partially fund insurance programs after the date of termination. State laws vary as to payment of accrued vacation and sick leave upon termination. All of these payments could be considered a form of severance pay. Reasons Paid Even though it is not usually required, many employers provide severance pay anyway to avoid lawsuits, assist loyal departing employees, help moral of remaining employees, or comply with law. The amount of the severance usually depends upon length of service, amount of compensation, level of employment, good will of the employer, and extent of possible claims against the employer.
Many companies pay a week or two of severance pay for every year of employment.
Stress your value to the company and the extent of your damages. Make them understand their potential liabilities. Revocability Many severance agreements which require a full release of an employee's rights are revocable. It is illegal for an employer to condition a release of rights on receipt of money that is already owed to the employee, such as earned wages. In fact, failure to promptly pay wages upon termination can result in fines, a continuation of wages and a criminal penalty against the employer.