Severance with or without an Agreement?

Provided by:  Jennifer Kirschenbaum, Esq.

April 20, 2021

Question:

Hi Jennifer, 

I am firing an employee. I would like to give her 2 weeks severance. Do I have to have her sign an agreement? 

Thanks,
Dr. B


Answer:

No, you do not have to have an agreement signed to pay out severance, but, if you would like to part ways with a clean break, yes, you will want a severance agreement executed.  Depending on the age of the departing employee, the agreement may require 21 days of consideration by the employee, and another 7 days for revocation. Also, the release language in the severance agreement will be "legal".  Many employees will not sign without a lawyer reviewing, which can delay delivery and separation. Many employers will elect to separate without a severance agreement, even if an extra week or two is paid out, but in a very litigious environment, oftentimes hindsight can be 20/20 and the employer should have pushed for a signed severance agreement with release.