Is My Severance Package Fair?
There is no law in the U.S. that requires employers to offer severance. When they do, the package's fairness depends on your tenure, your role level, the reason for your departure, and — critically — what the company has offered others in similar situations. This page explains typical ranges and gives you a framework for evaluating and negotiating your offer.
If you are 40 or older: The Older Workers Benefit Protection Act (OWBPA) gives you a mandatory 21-day review window before you must sign any agreement that waives age discrimination claims. You also have 7 days after signing to revoke. An employer cannot pressure you to sign faster — any waiver signed before the 21 days is unenforceable.
Typical severance by tenure
The ranges below reflect private-sector norms for non-executive roles. Executive and C-suite severance typically involves separate negotiated agreements and is not reflected here.
Many companies apply a minimum of 2 weeks regardless of tenure.
1–2 weeks per year is the most common range in this band.
Negotiating beyond the formula becomes more viable here.
Most companies cap at 26 weeks; beyond requires negotiation.
Caps are most commonly negotiated around and above at this tenure.
What you can negotiate
Cash pay is only one element of a severance package. Most employers have more flexibility on non-cash elements, which often matter more in the long run:
- COBRA subsidy. Health insurance coverage typically ends the last day of the month you're separated. Asking the company to cover your COBRA premiums for 3–6 months is one of the most valuable wins you can negotiate.
- Equity acceleration. If you have unvested stock options or RSUs, ask for accelerated vesting of the next tranche (or all unvested shares in a change-of-control situation). Many companies will agree on partial acceleration.
- Extended exercise window. Standard option exercise windows are 90 days after separation. Ask to extend this to 1–3 years — it's a meaningful benefit that often costs the company nothing directly.
- Last day adjustment. A later last day can mean renewing health coverage through the new month, or qualifying for a bonus payment date. Even 3–5 extra days can have material financial value.
- Reference letter. Request a signed, specific reference letter — not just a policy to confirm dates of employment. This is especially valuable in industries where verbal references are common.
What to review before signing
- Scope of the release. You are likely releasing the company from employment claims. Verify exactly what you're giving up — particularly age discrimination, disability, or hostile workplace claims.
- Non-disparagement clause. Many are one-sided. Ask whether it applies to the company too (i.e., whether they commit not to make negative statements about you).
- Non-compete scope. Check geographic area, duration, and scope of restricted activities. Courts in many states (California, North Dakota, Minnesota) will not enforce non-competes at all — but they still appear in agreements.
- Cooperation clause. Some agreements require you to assist with future litigation or investigations on the company's behalf. Make sure the scope is limited and doesn't interfere with new employment.
Frequently asked questions
What is a typical severance package?
There is no legal requirement for employers to offer severance in the U.S., but when they do, the most common formula is 1–2 weeks of base pay per year of service, up to a cap (often 26 weeks). Senior employees and executives frequently negotiate packages outside this formula. The Separation Index collects confirmed reports to give you a real benchmark for your industry and company.
Is 2 weeks of severance per year of service fair?
2 weeks per year of service is generally considered above average in the U.S. private sector. The floor offered by many companies is 1 week per year. If you have more than 5 years of tenure, it is reasonable to ask for more than the standard formula — particularly if your departure is due to a restructuring or role elimination rather than performance.
What is the OWBPA 21-day review window?
If you are 40 years old or older, the Older Workers Benefit Protection Act (OWBPA) requires your employer to give you at least 21 days to review any severance agreement that includes a waiver of age discrimination claims under the ADEA (Age Discrimination in Employment Act). You also have 7 days after signing to revoke your acceptance. Do not let an employer pressure you into signing before the 21 days are up — any such waiver signed under pressure may be unenforceable.
Can I negotiate my severance package?
Yes — severance is almost always negotiable, especially in layoffs. Common levers include: extended benefit continuation (COBRA subsidy), accelerated equity vesting, an extended exercise window for stock options, outplacement services, a later last day to allow for benefit renewal, or a neutral reference letter. Most employers expect some negotiation on severance and have flexibility built into their initial offer.
What should I review before signing a severance agreement?
Before signing, review: what claims you are releasing (particularly age, disability, or discrimination claims), whether non-disparagement cuts both ways, the non-compete and non-solicitation scope and duration, whether your unvested equity is forfeited, and whether the agreement requires you to assist with litigation. Consider consulting an employment attorney — many offer free initial consultations, and the leverage you gain often far exceeds their fee.
How does The Separation Index help me evaluate severance?
The Separation Index aggregates confirmed, anonymized separation reports that include severance week data, notice method, and years of service. The Benchmark page shows median severance by industry and company size. Company profiles show average severance from confirmed reports — so you can see what people at your specific company actually received, not just what is standard in your industry.
The information on this page is for general education only and does not constitute legal or financial advice. If you are considering signing a severance agreement, consult a licensed employment attorney in your jurisdiction.
See median severance by industry and company — or report your own experience to help others benchmark their offers.