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Do California workers have a right to severance pay?

On Behalf of | Jun 13, 2024 | Wage & Hour

California law offers relatively thorough protections for employees. Workers who don’t understand their rights may fail to notice when companies violate them. They may also have unrealistic expectations about how a company should treat them.

For example, employees sometimes assume that they have a right to severance pay when they leave a job with an organization. Is severance pay typically an automatic right for a worker facing a sudden termination or layoff?

When does severance pay require an agreement?

Some companies do provide severance when they have mass layoffs. Doing so can be a way to ease the burden on workers during staffing reductions. In other situations, a worker needs to have a severance agreement with the company to have a legal claim to a severance package.

California state law does not actually require that employers provide severance pay when a worker ends their employment with the company. A worker typically needs to have terms in their contract discussing severance pay to hold an employer accountable for denying them support after they lose their job.

Often, the best time to negotiate the terms of a severance package is when a company first hires an employee. However, people who are preparing to exit an organization also potentially have an opportunity to negotiate a severance package.

Securing the right assistance when proposing, reviewing or countering a severance agreement can help workers minimize the hardship they face after the loss of a job. Employees with a severance agreement may need to take legal action to assert themselves if a company does not pay them appropriately.