ABA Family Legal Guide

Law and the Workplace

Leaving a Job

Being Fired

Is an employer required to pay severance pay when it fires a worker?

There is no law requiring employers to pay severance pay. If the employee has a written contract guaranteeing severance pay, or if there is a collective bargaining agreement providing for severance pay, then the employer will be required to pay severance. Otherwise, the employer is under no obligation to pay it.