Immediate, High-Stress Questions

Do I have to sign a severance agreement?
No. A Severance Agreement is a value exchange between you and the company. They are offering you something of value in exchange for you waiving certain rights, such as the ability to sue or certain new employers. You don’t have to sign, but if you don’t, you may not receive the offered benefits.

How much severance pay should I get?
There’s no universal standard as severance is not require under the law.  A common rule of thumb is 1–2 weeks of pay per year of service, but it varies widely by company, role, and negotiation.

Is severance pay required by law?
In the U.S., no. Employers are not legally required to offer severance unless it’s in your contract, company policy, or part of a union agreement. 

How long do I have to sign a severance agreement?
It depends. Many companies give 21 days (45 days in group layoffs of employees over 40, per federal law) and a 7-day revocation period after signing. Always check the document for deadlines.

Can I negotiate severance pay?
Yes. You can often negotiate for more money, extended benefits, positive references, or changes to restrictive clauses. Whether the employer agrees depends on leverage and circumstances. A severance agreement is optional for both parties which makes everything in it negotiable. 

What happens if I don’t sign a severance agreement?
You keep the right to pursue legal claims, and any other rights they were asking you to give up, but you won’t receive the severance package (pay, benefits, extras) being offered.

Money & Benefits

Will I still get health insurance if I’m laid off?
Your employer coverage ends at the end of the last month of your employment, but you may qualify for COBRA (continuation of your current plan, usually at your own cost), ACA marketplace insurance, or a spouse’s plan.

How does COBRA work after a layoff?
COBRA lets you continue your employer’s health insurance for up to 18 months after your departure date. You pay the full premium (your part + employer’s part + a 2% fee) each month to retain the same coverage. Sometimes employers subsidize COBRA costs in severance. It's one of the commonly negotiated items. 

Does severance affect unemployment benefits?
It depends on your state. Some states reduce or delay unemployment if you’re receiving severance; others don’t. Check your state’s rules.

Do I get paid out for unused vacation or PTO?
In many states, yes—employers must pay out accrued but unused vacation. Sick time usually isn’t paid out unless company policy says so. If you are in a state where the employer is not legally required to pay you PTOm you can still negotiate it into your agreement. 

Are severance payments taxed?
Yes. Severance is treated as regular wages for tax purposes, with federal, state, and payroll taxes withheld. Check if you're getting a lump sum or payment overtime as they are taxed differently. 

Legal & Career Concerns

Should I hire a lawyer to review my severance agreement?
If the agreement includes non-competes, IP rights, big money, or feels unclear, it’s smart to get a lawyer. The toughest realization of signing a severance agreement is not knowing what you've given up. You may regret signing away a right you had or needed later.

What should I watch out for in a severance agreement?
Key clauses to review: release of claims, non-compete, non-disparagement, confidentiality, rehire eligibility, and benefits timing.

Can I still sue my employer if I sign a severance agreement?
Generally no—in most severance agreements, part of the trade off is you’re waiving your right to sue for most claims in exchange for the money when you sign. Some rights (like filing with the EEOC) cannot be waived, but monetary recovery may be limited.

What are non-compete and non-disparagement clauses?

• Non-compete: restricts where you can work afterward.

• Non-disparagement: prevents you from speaking negatively about the company. Both can impact future opportunities.

• Non-disclosure: restricts what information you can use or share in your next job(s). 
• Non-solicitation: restricts which people you can build relationships with, or do business with moving forward. 

Can signing affect my ability to get a new job?
Yes, if there are restrictive clauses (non-compete, IP ownership, confidentiality, non-solicitation, etc). These all affect if, when, how and where you can get a job. Otherwise, signing alone doesn’t stop you from working elsewhere.

Long-Term Impact

Does a layoff look bad to future employers?
No. Layoffs are usually viewed as business decisions, not personal failures—especially during large reductions in force.

Can I get rehired after being laid off?
Sometimes. Some companies rehire former employees, where others state in the severance agreement that you are prohibited for working there again. Check if your severance agreement includes a “no-rehire” clause (many do).

What happens to my 401(k), stock options, or RSUs after a layoff?

• 401(k): You keep it. You can leave it, roll it over, or cash out (penalties may apply). 401(k) matching may have a vesting period where there is a delay on when it becomes yours. Check your severance agreement to confirm that any company matches are 100% yours. 

• Stock/RSUs: Vesting usually stops at termination unless your agreement says otherwise. Work to negotiate into your agreement accelerated vesting or a grace period so that everything you were earning becomes yours upon termination. 

How do I protect myself if I think the layoff was discriminatory?
Document what happened, don’t sign away rights immediately, and consult an employment lawyer before signing a severance agreement. A lawyer can tell you the odds of success, and value of your potential case and you can decide if it's worth pursuing vs accepting the severance package.