question.jpgIn HR/Employment Law

Am I legally entitled to severance pay?

Under the Fair Labor Standards Act, employees are not legally entitled to severance pay. Severance pay is a matter of agreement between an employer and an employee, and an employee is only entitled to it when there is an agreement. For example, many employees have an employment contract that obligates an employer to pay severance. Further, employee handbooks may promise severance, and if a company has a long history of providing severance pay, it may have to continue to do so out of custom. And, of course, some employers simply offer severance pay out of generosity.

Though there is no one particular formula as to how much the severance will actually be, employers often base severance pay on the length of time an employee has been with the company (for instance, one or two weeks for every year the employee worked at the company).