Before you sign a severance agreement

• 21 daysMinimum time to review at 40+ in a one-person layoff
• 45 daysMinimum time to review at 40+ in a group layoff
• 7 daysTo take back your signature at 40+ - no one can shorten it
• 22%Federal withholding when severance is paid separately from salary
• 7.65%Social Security and Medicare still come out of the check
• NoneFuture claims an age release can cover - only claims up to signing

• A release usually covers discrimination, wrongful termination, and contract claims up to the day you sign. At 40+, federal law bars it from covering claims that come up after you sign.
• At 40+, the agreement has to name the Age Discrimination in Employment Act, tell you in writing to talk to a lawyer, and give you something you aren't already owed.
• In a group layoff at 40+, the agreement has to list the job titles and ages of the people chosen and not chosen, plus who was eligible.
• Signing doesn't take away your right to file a charge with the EEOC or take part in its investigation. The release can still limit money you personally recover.
• The IRS treats severance as wages: income tax withholding (22% flat when paid separately, 37% on supplemental pay over $1 million in a year), plus Social Security and Medicare.
• In some states severance can delay unemployment. In New York, severance that starts within 30 days of your last day and is more than the maximum weekly benefit blocks benefits while it's being paid.
• Vested 401(k) money is yours whether you sign or not, and anything you put in yourself is 100% vested.
• Under the NLRB's McLaren Macomb decision (2023), broad confidentiality and non-disparagement clauses offered to non-supervisory employees can break federal labor law. As of September 2026 it still applies, though the NLRB's General Counsel has asked the Board to overturn it.

Sources:EEOC: Severance agreement waiversIRS Publication 15NY DOL: Severance and unemploymentIRS: Vesting

You accept the terms and get paid on the agreement's schedule. It's the quickest path to cash if nothing about the layoff feels off. The catch: you trade away claims, including ones you haven't spotted yet, and at 40+ the money still waits out a 7-day window.

If the catch is a dealbreaker: If the layoff might be about age, leave, or a complaint, the 'Don't sign' card below lists the deadlines that still apply.

• WeeksMore weeks of pay, often tied to years of service
• COBRACompany-paid COBRA premiums for a set number of months
• EquityFaster vesting or more time to exercise stock options
• NeutralA neutral reference and agreed wording for why you left
• ScopeA narrower release, non-compete, or confidentiality clause
• Job helpOutplacement or job-search services
• 19.3 wksAverage severance across industries, Challenger 2024 data

• The signing deadline doesn't pause while you ask. Only the company can agree to extend it.
• At 40+, big changes to the final offer restart the 21- or 45-day review clock and small ones don't. Both sides can agree in writing that no change restarts it.
• Challenger, Gray & Christmas put average severance at 19.3 weeks in 2024 data, with individual contributors averaging under 10 weeks and VPs and directors 15-25.
• Non-competes are void for most workers in California, Minnesota (agreements since July 1, 2023), North Dakota, and Oklahoma.
• In 2026, Washington voids non-competes for employees earning under $126,858.83 and Colorado under $130,014. Washington's near-total ban starts June 30, 2027.
• There is no federal non-compete ban. Courts struck down the FTC rule, the FTC dropped its appeal on September 5, 2025, and it removed the rule from the federal code in February 2026.
• If a company with 100+ employees skipped the 60 days' notice the WARN Act requires, it can owe up to 60 days of back pay and benefits.
• The Speak Out Act (2022) makes confidentiality and non-disparagement clauses signed before a sexual harassment or assault dispute unenforceable in court for that dispute.

Sources:29 CFR 1625.22Challenger: Severance benchmarksFederal Register: Non-Compete Rule removedMinnesota Statutes 181.988DOL: WARN ActSpeak Out Act

You reply in writing before the deadline with specific asks, like more weeks, COBRA months, or a narrower non-compete. It works for people whose offer is close and who can wait a little longer for the check. The catch: the company doesn't have to say yes, and the deadline keeps running while you wait.

If the catch is a dealbreaker: No time to go back and forth? Some people start by asking in writing for a deadline extension.

• 180 daysTo file an EEOC charge in most cases
• 300 daysWhere a state or local agency enforces a similar law
• 60 daysTo elect COBRA, signed or not
• 18 moOf COBRA coverage after a layoff
• 100%Of your own 401(k) contributions stay yours
• $0Severance, unless you settle or negotiate later

• The EEOC deadline is 180 days from the layoff, or 300 days where a state or local agency enforces a similar law. For age claims, only a state law gets you to 300.
• Your last paycheck for work already done is owed under wage law, whether or not you sign. States set different deadlines for paying it.
• COBRA comes from federal law, not the agreement: 18 months of coverage after a layoff and 60 days to enroll, at plans with 20 or more employees.
• Unemployment is a state benefit decided by your state. Turning down severance doesn't affect whether you qualify.
• Minimum wage and overtime claims under the FLSA generally can't be privately released without Department of Labor or court supervision.
• Not signing doesn't cancel agreements you already signed, like a non-compete or confidentiality agreement from when you were hired.

Sources:EEOC: Time limitsDOL: COBRA overviewDOL: Severance pay

You let the offer expire. It fits people with a real claim - age, leave, retaliation, or discrimination - that may be worth more than the check. The catch: you walk away with $0 now, and a claim can take months with no guaranteed result.

If the catch is a dealbreaker: Not sure a claim beats the check? An employment lawyer can size it up before the signing deadline, and some offer free consultations.