California Employee Severance Laws

Each state has its own laws about what type of pay employees are entitled to receive upon termination from employment. In California, employers are not required to offer severance, but they often do in order to limit their potential liability and have employees waive any potential claims they may have against the employer. What state laws must California employers follow when offering severance pay to a terminated employee?

Pay upon termination

Severance Pay. There is no requirement under California law that employees be paid severance upon termination from employment. Severance pay, however, may be offered under a severance pay plan, in an employment agreement or in a collective bargaining agreement for union workers. Except for the obligation to comply with severance terms in these agreements, employers can offer severance packages to any terminated employees even when it is not required.