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Severance Agreement template

A severance agreement sets out the pay and benefits an employer offers a departing employee, usually in exchange for the employee releasing certain legal claims against the employer.

Replace everything in [BRACKETS], export to PDF, then send it for signature.

1. Parties and Separation Date

This Severance Agreement (the "Agreement") is made between [EMPLOYER NAME], located at [EMPLOYER ADDRESS] (the "Employer"), and [EMPLOYEE NAME], residing at [EMPLOYEE ADDRESS] (the "Employee"). The Employee's employment as [JOB TITLE] ends on [SEPARATION DATE] (the "Separation Date").

2. Amounts Owed Regardless of Signature

Whether or not the Employee signs this Agreement, the Employer will pay the Employee all salary earned through the Separation Date, [payment for accrued, unused leave,] and any reimbursable expenses submitted by [EXPENSE DEADLINE], in accordance with applicable law.

3. Severance Benefits

In exchange for the Employee's promises in this Agreement, and provided the Employee signs and does not revoke it, the Employer will provide: (a) severance pay of [AMOUNT AND CURRENCY], equal to [NUMBER] weeks of base salary, paid [in a lump sum / in installments on regular paydays] beginning [TIMING]; (b) [BENEFITS CONTINUATION, e.g. payment of health insurance premiums until DATE]; and (c) [OTHER, e.g. outplacement services, equipment, or reference letter]. The Employee acknowledges these benefits exceed anything the Employee is otherwise entitled to receive.

4. Release of Claims

To the fullest extent permitted by law, the Employee releases the Employer and its affiliates, officers, directors, and employees from all claims, known or unknown, arising out of the Employee's employment or its termination up to the date the Employee signs this Agreement. This release does not cover: claims that cannot be waived by law; rights to vested benefits; rights under this Agreement; or the right to file a charge with, or participate in an investigation by, a government agency.

5. Review and Revocation Period

The Employee has [REVIEW PERIOD, e.g. twenty-one (21)] days to consider this Agreement and is advised to consult a lawyer of the Employee's choosing before signing. [OPTIONAL, WHERE REQUIRED BY LAW: After signing, the Employee may revoke this Agreement within REVOCATION PERIOD days by written notice to CONTACT.] This Agreement becomes effective after any revocation period ends without revocation.

6. Return of Property

The Employee confirms that the Employee has returned, or will return by [RETURN DATE], all Employer property, including devices, documents, access cards, and data, and has not kept any copies.

7. Continuing Obligations

The Employee remains bound by any confidentiality, intellectual property, and other post-employment obligations in the Employee's employment contract or other signed agreements, to the extent enforceable. Nothing in this Agreement prevents the Employee from reporting possible legal violations to a government authority or from making disclosures protected by law.

8. Mutual Non-Disparagement and Reference

[OPTIONAL: The Employee agrees not to make false or disparaging statements about the Employer, and the Employer will instruct NAMED MANAGERS not to make false or disparaging statements about the Employee.] On request, the Employer will confirm the Employee's dates of employment and job title [and provide the agreed reference attached as Schedule A].

9. No Admission and Taxes

This Agreement is not an admission of wrongdoing by either party. Payments under this Agreement are subject to applicable tax withholding and deductions, and the Employee is responsible for any taxes owed on them beyond amounts withheld.

10. Governing Law and General Terms

This Agreement is governed by the laws of [GOVERNING LAW JURISDICTION]. It is the entire agreement between the parties about the Employee's separation and replaces any earlier discussions on the subject, but does not replace the continuing obligations referred to in Section 7. If any provision is unenforceable, the rest remains in effect.

11. Signatures

The Parties agree that this Agreement may be signed electronically and in counterparts, and that electronic signatures have the same effect as handwritten signatures. By signing, the Employee confirms that the Employee has read and understands this Agreement, has had the opportunity to seek legal advice, and signs it voluntarily. EMPLOYER: [EMPLOYER NAME] Signature: ____________________ Name: [SIGNATORY NAME] Title: [SIGNATORY TITLE] Date: [DATE] EMPLOYEE: [EMPLOYEE NAME] Signature: ____________________ Date: [DATE]

When to use this template

  • When offering a departing employee a severance package beyond what they are already owed
  • When eliminating a role due to layoffs, restructuring, or redundancy
  • When ending employment by mutual agreement and you want a clean separation
  • When you want a signed release of claims in exchange for severance pay

How to fill it in and get it signed

  1. Enter the employer, employee, job title, and separation date.
  2. List what the employee is owed regardless of signing, then the additional severance pay and benefits.
  3. Set the review period and any revocation period required by local law, particularly for older workers or group layoffs.
  4. Review the release carve-outs, continuing obligations, and optional non-disparagement clause, and fill in the governing law.
  5. Upload the agreement to eSignSimple and send it to the employee and your authorized signatory for e-signature.

This template is general information, not legal advice. Laws differ by country and state; have a lawyer review contracts with high stakes.

Frequently asked questions

Is an employer required to offer severance pay?

It depends on the jurisdiction and the employee's contract. Some countries require statutory severance, while in others it is voluntary and usually offered in exchange for a release of claims.

What claims can an employee release in a severance agreement?

Usually most employment-related claims, but some rights cannot be waived by law, such as certain wage claims or the right to contact government agencies. Release rules vary by jurisdiction.

How long does an employee have to consider a severance agreement?

Some laws set minimum review and revocation periods for certain employees, such as older workers. Even where none is required, giving reasonable time helps show the agreement was signed voluntarily.

Can a severance agreement be signed electronically?

In most jurisdictions, yes. eSignSimple records timestamps, IP addresses, and a document hash in an audit trail, which helps show when the employee received and signed the agreement.