Your employer just handed you a number, or told you there isn't one coming at all -- and you have no idea if that's normal. Here's what US law actually requires, what the common market norm looks like, and how to size up your own situation before you sign anything.
If you've just been told your position is being eliminated, one of the first questions is simple: what, if anything, are you owed? The honest answer for most US workers is that there's no fixed number set by law -- which makes it hard to know whether an offer on the table is generous, typical, or thin. This guide walks through what's actually required, what a common informal severance norm looks like in practice, and how to sanity-check a real offer against it.
Is severance actually required by law?
Quick answerNo, not in most cases. The US has no federal law requiring employers to pay severance to laid-off or terminated employees in general. Most US employment is "at-will," meaning either side can end it without cause and without a mandated payout, unless a written company policy, an individual contract, or a union agreement says otherwise.
This surprises a lot of people, especially if they've worked abroad or read about severance rules in other countries. In the US, whether you get anything at all depends on your specific employer's policy (if one exists in writing), the terms of your own offer letter or employment contract, any union collective-bargaining agreement that applies to your role, and sometimes simply what a company chooses to offer to reduce the risk of a lawsuit or to maintain goodwill. Absent one of those, severance is discretionary -- a business decision, not a legal entitlement.
What the WARN Act really covers (and doesn't)
Quick answerThe WARN Act requires employers with 100+ full-time employees to give 60 calendar days' advance written notice before a covered plant closing or mass layoff. If they skip that notice, workers may be owed back pay for the notice period -- but that is not the same thing as a severance package, and WARN does not apply to most individual terminations or smaller companies.
Common mix-up: people often assume "WARN Act" means guaranteed severance. It doesn't -- it's a notice law with a back-pay remedy if notice is skipped, not a general severance mandate.
- Who it covers: employers with 100 or more full-time employees, for a covered plant closing or mass layoff that meets size thresholds.
- What it requires: 60 calendar days' advance written notice to affected employees (and often local government agencies).
- What it doesn't do: require any severance payment for a compliant layoff, or apply to most small businesses or single, individual terminations.
The common 1–2 weeks/year norm, with example numbers
Quick answerThere's no official formula, but a widely cited informal market norm is 1 to 2 weeks of pay per year of service for non-executive roles, with senior managers and executives sometimes seeing 3 to 4+ weeks per year, or a lump sum equal to several months' salary. Plenty of employers, especially smaller ones or for-cause terminations, offer nothing.
To make this concrete, here's an illustrative example -- not a real case, and not a guarantee -- for a hypothetical employee earning $60,000/year (about $1,154/week):
Example only: illustrative severance at common informal rates, $60,000/year salary
| Years of service | At 1 week/yr | At 2 weeks/yr |
|---|
| 2 years | $2,308 | $4,615 |
| 5 years | $5,769 | $11,538 |
| 10 years | $11,538 | $23,077 |
| 15 years | $17,308 | $34,615 |
Say you're a hypothetical 5-year employee at that same $60,000 salary and your employer offers a flat $6,000 lump sum. That lands close to the 1-week-per-year norm ($5,769) and a bit under 2 weeks/year ($11,538) -- in other words, on the lower-but-typical end, not an outlier in either direction. That's the kind of comparison worth running before you decide whether to push back or ask questions about how the number was calculated.
How to check an offer you already received
If you already have a number in hand -- a dollar amount or a stated number of weeks -- the useful move isn't to guess whether it's "fair" in the abstract, it's to translate it into weeks-per-year-of-service and compare that ratio to the common 1–2 week norm above. You'll also want to factor in that severance is taxed as wages: the IRS commonly withholds a flat 22% federal rate on supplemental wages like severance, on top of Social Security/Medicare (FICA) and any state income tax, so the number on the offer letter isn't what lands in your account.
Beyond the headline dollar figure, it's worth looking at the whole package: continued health coverage (often a subsidized COBRA period), payout of unused PTO, outplacement assistance, extended stock option windows, and whether you're being asked to sign a release of legal claims in exchange. Since severance is discretionary rather than fixed by law, there is often room to negotiate these terms, particularly for larger or more complex packages -- consider an employment attorney's review before signing anything that waives your legal rights.
Severance vs. unemployment insurance: these are two separate things. Severance is a discretionary, employer-paid amount tied to your specific job separation. Unemployment insurance (UI) is a mandatory, state-run program funded by payroll taxes that pays eligible workers a weekly benefit regardless of severance -- though in some states, the timing or structure of a severance payment can affect when UI benefits start.
Frequently asked questions
Is severance pay required by law in the United States?
No. Most US employment is at-will, and there is no federal law requiring employers to pay severance to most laid-off or terminated employees. Severance is offered at an employer's discretion, or because of an individual contract, a union agreement, or a written company policy. The WARN Act is a notable exception, but it requires advance notice, not severance pay.
What is the WARN Act, and does it guarantee severance pay?
The WARN Act requires employers with 100 or more full-time employees to give 60 calendar days' advance written notice before a covered plant closing or mass layoff. If they don't, affected employees may be owed back pay for the notice period they should have received -- that back-pay remedy is not the same as severance pay, and WARN does not apply to most individual terminations or smaller employers.
How much severance pay is typical in the US?
There is no legal formula, but a common informal norm is 1 to 2 weeks of pay per year of service for non-executive roles, with senior managers and executives sometimes receiving 3 to 4 or more weeks per year. Many employers, especially smaller companies or terminations for cause, offer no severance at all.
Is severance pay taxable?
Yes. Severance is treated as wages by the IRS and is subject to federal income tax withholding, Social Security and Medicare (FICA) taxes, and applicable state income tax. It is commonly paid via regular payroll or as a supplemental wage payment and reported on a W-2.
Can I negotiate my severance package?
Often, yes. Since severance is discretionary rather than a fixed legal amount, there's frequently room to negotiate the number of weeks, timing of payment, continued health coverage, PTO payout, or references -- especially when the company is asking you to sign a release of legal claims in exchange.