Can you sue for unpaid severance pay?
Asked by: Arnulfo Stroman PhD | Last update: June 19, 2025Score: 4.8/5 (26 votes)
Take legal action if your employer fails to honor a severance agreement. File a lawsuit for breach of contract since severance agreements are legally binding. Consult an employment lawyer to assess your case and recover the promised severance pay.
What happens if I don't get my severance pay?
Fortunately, California is stricter about these violations than most other states. Employees can file an official complaint with the state and/or engage an employment lawyer to get the severance they are owed.
Can you sue for not getting severance pay?
Severance pay isn't usually considered wages owed, so you usually can't file a wage claim for unpaid severance even if it was promised or agreed to, but you can file a private lawsuit.
Do severance agreements hold up in court?
In California, severance agreements are legally binding contracts. Depending on how the agreement is structured, signing it may not always be in your best interests. Learn what to consider before signing your severance package and how a California employment law attorney can help you protect your rights.
How enforceable are severance agreements?
While severance agreements are generally binding upon signature, their enforceability is not immune to challenge. However, employees faced with signing such agreements should approach them with awareness of their rights and seek legal counsel if they suspect terms are unfair or unlawful before signing.
Can You Still Sue for Workplace Discrimination if You Take a Severance Package?
Can I still sue after signing a severance agreement?
In California, this agreement is binding, and there's no going back once it's signed. If you waive your legal rights, you're agreeing to not take any action against the employer. This means you can't sue them, regardless of how much evidence you may have to prove that they wronged you.
What is the rule of 70 for severance?
5) What is the Rule of 70 for severance? In the United States, the "Rule of 70" for severance is a simple way to determine if an employee is eligible for retirement-related. If the sum of the employee's years of service and age is 70 or more, you can combine retirement benefits as severance pay.
What voids a severance agreement?
Fraud, misrepresentation, duress, or unconscionability are common defenses you can use if you want to void a severance agreement that you already signed.
Can you fight for severance pay?
Sometimes, employees can negotiate those terms. Regardless, they must sign the agreement to receive their severance package. Your power to negotiate a severance package lies in the fact that companies don't want you to bad-mouth or sue them.
Can an employer sue an employee after termination?
Sometimes this is done in retaliation, such as if the employee feels he or she did not get severance pay or other compensation they expected. However, these actions are illegal and can be considered misappropriation or theft, and may be grounds for the employer to sue the former employee.
Can a company deny severance pay?
If not, however, nothing in California law requires your employer to pay you severance. If your employer has never agreed to do so by way of company policy or contract, then they have no obligation to pay you severance.
Can I sue if I get laid off?
No matter how unfair it might feel to suddenly lose your job, you generally can't sue an employer simply for laying you off. This is because, in California, most employees are considered “at will.” At-will employment means that your employer can legally fire you—and you can quit—at any point and for almost any reason.
Which states require severance pay?
There's no federal or state legislation requiring employers to offer severance pay (although we'll discuss a potential scenario below), but many do opt for it.
Can you sue for lack of severance?
Take legal action if your employer fails to honor a severance agreement. File a lawsuit for breach of contract since severance agreements are legally binding. Consult an employment lawyer to assess your case and recover the promised severance pay.
What is typical severance pay?
How Is Severance Pay Calculated? Employers typically consider the employee's salary level and length of service to calculate severance pay. Most employers provide an average of one to two weeks' salary for each year of service. They may also adjust the amount based on an employee's tenure or role in the company.
Can you be terminated without severance?
In these cases, employers are generally not required to provide severance pay or notice, as the dismissal is justified under California's at-will employment laws.
Can I lose my severance pay?
Let's take a look at a few scenarios where severance pay might stop: Ongoing severance pay could be conditioned upon you remaining an employee of the company – so if you start a new job, that start date at the new job becomes the end date at the old job. That also means severance pay would stop from that day forward.
What is the average severance settlement?
The typical severance pay employers provide is one to two weeks for every year the employee worked, but the employee's rank can play a role in how much you offer. Upper management employees might get a higher severance pay amount, for example.
Can I still sue if I signed a release?
If an employee was terminated for reasons that violate California public policy—such as whistleblowing, reporting illegal activity, or refusing to engage in unlawful conduct—a wrongful termination claim may still be valid, regardless of the release agreement.
What are the red flags in a severance agreement?
Severance agreements can provide crucial financial support for departing workers, but employers often have ulterior motives when offering them. Pressure to sign, inadequate pay or benefits, protections favoring the employer at your expense, and overly restrictive provisions are red flags in a severance agreement.
Can you contest a severance package?
Remember, once you sign a severance agreement, you forfeit all your legal rights against your employer. In California, these agreements are binding, which means there's no going back once you've signed. Protect yourself and fully understand the implications of what you're signing.
How long does it take to get severance pay?
In many cases, severance pay is disbursed shortly after your employment ends, often within a few weeks. However, it can take longer depending on factors such as legal reviews, administrative processes, or the terms agreed upon in your severance agreement.
What is prohibited in severance?
Separation agreements cannot include language barring you from pursuing legal action for past or potential injuries, including any bodily harm resulting from accidents, occupational hazards, or unsafe working conditions.
What is fair severance pay?
Pay. It is standard to be paid for any accrued vacation time and also to be offered an additional lump sum, usually two weeks of pay for every year at the company. This formula could change depending on your rank or position with the company, and you might be able to negotiate for more.
What is maximum severance?
Total severance pay is limited to 52 weeks of pay. If an employee is reemployed before exhausting the 52 weeks, and becomes eligible for severance pay again, the severance fund will be recomputed based on creditable service and current age and paid out for the period of the 52 weeks remaining to the employee.