Although severance pay is not generally legally required, there are exceptions. Actual practices or promises of your employer may provide for severance pay. If you are a member of a union, a collective bargaining agreement usually requires some sort of severance benefits. Federal law makes certain employers pay 60 days of pay if 60 days prior warning of termination has not been given. 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.