Severance 101: What's Standard, What's Negotiable

There's a detail about severance that surprises a lot of people the first time they're laid off: outside of mass layoffs covered by the WARN Act, most companies aren't legally required to offer severance at all. What you receive is largely a matter of company policy and, often, how much you're willing to push back.

A commonly cited starting point, though far from universal, is one to two weeks of pay for every year of service, sometimes more for senior roles or longer tenure. Treat that as a reference point, not a guarantee. Severance varies enormously by company size, industry, role level, and the circumstances of the layoff itself. A small startup running out of cash and a public company managing a planned restructuring can offer very different packages even at similar tenure.

What's often negotiable, even when the base severance number feels fixed, includes the timing of the final payment, whether unused vacation gets paid out, how long employer-paid health coverage continues before you're responsible for the full premium, and whether the company will agree to a neutral reference rather than a negative one. These details rarely show up in the headline number, but they add up to real value.

One thing worth knowing before signing anything: severance agreements are almost always conditioned on signing a release, a document waiving your right to sue the company over the termination. That's standard, but it's also the reason it's worth actually reading the agreement closely, ideally with someone who can explain what you're giving up, rather than signing quickly to get the payment moving.

Severance offers also tend to arrive with a deadline attached, often with language suggesting it's non-negotiable. In practice, many companies will engage if you ask, particularly on the non-monetary terms. The worst outcome of asking is usually just a no.