Deed of severance template 2025

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A separation agreement is a contract between a company and a departing worker, usually an employee (though sometimes an independent contractor). Typically, the company offers some type of payment (often called a severance) in exchange for a waiver and release of claims.
Service-Based Pay: Some companies use a formula such as one weeks pay for every year of service. More generous packages might offer a months pay for every year of service. Lump-Sum Payments: Other severance packages provide a lump-sum payment, which can vary based on negotiations and company policies.
Under California law, a severance agreement is considered a legally binding contract. Before signing an agreement, you are entitled to specific rights under various provisions of the California Labor Code and contract laws: Right to review.
Most organizations choose to give around four weeks pay for each year the person has been employed (so someone who has worked there for three years would get 12 weeks pay, for example).
What should a severance agreement template include? Details of the parties involved. Names and roles of the employer and employee. Compensation and benefits. Confidentiality. Non-disparagement. Return of property. Legal obligations and rights. Dispute resolution. Legal jurisdiction.
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Initial Severance Offer Three months base salary (the actual severance lump sum payment). All her unused vacation days paid (required by state law). Six months of free health insurance. Stay for six more months full-time.

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