Layoffs and exits · 6 min read
How do I negotiate a severance package?
What a typical US severance package looks like, the parts you can negotiate beyond weeks of pay, the deadlines for over-40s and a script for asking for more.
The short answer
No US federal law requires severance pay, so most packages are a business decision, which means they're often negotiable. A common starting point is one to two weeks of pay per year of service, plus benefits continuation. Before signing, read what you're giving up (usually your right to sue), then ask for more on the items that cost the company least and help you most: extra weeks, COBRA premiums paid, a pro-rated bonus, accelerated vesting, a later end date, a neutral reference and outplacement. Ask politely, in writing, with a reason. If you're 40 or older, the law gives you at least 21 days to consider the agreement (45 in a group layoff) and 7 days to change your mind after signing.
Key takeaways
- Severance is usually paid in exchange for a release of legal claims, which gives you room to negotiate.
- One to two weeks per year of service is a common benchmark, not a rule.
- Weeks of pay are only one lever: benefits, bonus, equity, timing and references also move.
- Over 40? You get 21 days to review (45 in a group layoff) and 7 days to revoke, by law.
On this pageWhat you're being asked to sign
What you're being asked to sign
A severance agreement is a contract: the company pays you, and you give up the right to bring most legal claims against it. It usually also includes confidentiality, non-disparagement, return of property and sometimes a reminder of an existing non-compete. Read the release first. If you think you were selected because of age, race, sex, disability, a complaint you made or leave you took, talk to a lawyer before signing, because that release is worth more than the company's first offer.
The levers beyond weeks of pay
| Ask | Why it may be granted |
|---|---|
| Extra weeks of base pay | The easiest to justify with tenure or market data |
| COBRA premiums paid for 3 to 6 months | Often cheaper for the company than the cash equivalent |
| Pro-rated or full bonus | You earned most of it; shows fairness |
| Accelerated equity vesting | No cash cost to the company today |
| Later end date or paid notice | Lets you job hunt as an employee and hit a vesting date |
| Neutral reference and agreed message | Costs nothing, helps your search |
| Outplacement or training budget | Often pre-negotiated with a vendor |
| Release from a non-compete | Lets you take the best next job |
The deadlines that protect you
- Age 40 or over: under the Older Workers Benefit Protection Act, at least 21 days to consider an individual offer, 45 days in a group layoff, plus 7 days to revoke after signing. In a group layoff, the company must also tell you the job titles and ages of those selected and not selected.
- Under 40: there's no federal minimum, but asking for a week to review is normal and almost always granted.
- Don't sign in the meeting. Say thank you, ask for the document by email, and set a date to reply.
A script for asking for more
Thank you for the agreement and for the support during this transition. Before I sign, I'd like to ask for two changes. First, I was on track to receive my annual bonus in March, and I'd ask that it be paid pro rata to my end date. Second, given that roles at my level are taking four to six months to fill, I'd ask for twelve weeks of pay rather than eight, and for COBRA premiums to be covered for the same period. I'm keen to sign and close this out quickly.
Illustrative example: two asks, both granted
An engineer with six years' service is offered eight weeks' pay and one month of COBRA. She asks in writing for her end date to move six weeks later, past a vesting date, and for three months of COBRA. The company agrees to both, because neither costs much in cash, and her final package is worth roughly a third more.
Questions people ask
- Is severance pay required by law?
- Not under federal law. It's required only if your contract, an employee handbook, a union agreement or a company plan promises it. The WARN Act requires 60 days' notice, or pay in lieu, for qualifying mass layoffs and plant closings at employers with 100 or more workers, and some states have their own versions.
- What is a normal severance package?
- Many companies pay one to two weeks of base pay per year of service, often with a minimum of two to four weeks and higher multiples for managers and executives. Tech companies in recent layoff rounds have commonly offered around 16 weeks plus extra weeks per year of service. Your own company's past layoffs are the best benchmark, so ask former colleagues.
- Can asking for more severance get the offer withdrawn?
- It's rare when you ask politely and in writing. The company has already decided to pay you and wants the signed release. Avoid threats, keep the tone factual, and give a reason for each ask, such as a deferred bonus you'd have earned or the time it takes to find a role at your level.
- Should I have a lawyer review my severance agreement?
- It's worth it if the sum is large, you're giving up equity or bonus, you have a non-compete, or you think you were let go for a discriminatory or retaliatory reason. Many employment lawyers offer a flat-fee review. If your situation is simple, read the release and non-disparagement clauses carefully yourself.
- Does severance affect unemployment benefits?
- It depends on your state. Some states delay unemployment benefits while you're receiving severance or count it as wages for those weeks; others ignore lump-sum severance. File for unemployment right away anyway, and report the severance accurately, so your claim date is set.
Exercises are practice, not evidence of career fit or a qualification. How to read our guides and report a correction.
Sources
- Severance pay · US Department of Labor
- Understanding waivers of discrimination claims in employee severance agreements · US Equal Employment Opportunity Commission
- Worker Adjustment and Retraining Notification Act · US Department of Labor, Employment and Training Administration
How this page is written
Sources support the factual background, not a guarantee that an exercise predicts career fit. Fictional practice material is labelled. Dates record content updates; no independent expert review is implied. More about OffLadder.