Severance Pay 101: What You're Owed After a Layoff

Severance is not guaranteed — but it is negotiable, and most people leave money on the table by signing too fast.

There is no federal law requiring severance pay. What you receive depends on your employer's policy, your role, and — critically — what you're willing to ask for. Typical packages range from one to four weeks of pay per year of service, but the range is wide.

The standard formula: one to two weeks of pay per year of service, often capped. Executives and longer-tenured employees can negotiate more.

What's actually negotiable

Cash is only part of it. You can often negotiate continued health coverage, an extended equity vesting window, outplacement services, or a later official termination date (which buys time and keeps benefits running).

Don't sign on the spot. Most agreements give you at least 21 days to review, and employees over 40 get 45 days plus a 7-day revocation window under the Age Discrimination in Employment Act.

The part most people forget

Severance is a bridge, not a solution. A typical 8-week package sounds generous until you realize a professional job search often takes 3–6 months. That's the gap Cushion closes — income protection that pays out alongside your severance and state benefits, up to 60% of your income for up to 5 months.

Know what you're owed, negotiate what you're worth, and make sure the bridge is long enough to get you to the right next role.