Federal Law Does Not Require Employers to Pay Severance
The Fact
The U.S. Department of Labor states that there is no requirement in the Fair Labor Standards Act for severance pay. Severance is a matter of agreement between an employer and an employee.
What This Means
Unless your contract, a union agreement, or company policy promises it, an employer does not have to pay severance when you are let go.
Why It Matters
Many workers assume severance is guaranteed and plan around money that may never come.
Sources
U.S. Department of Labor. “Severance Pay.” https://www.dol.gov/general/topic/wages/severancepay