You just received your severance package and there's a clock ticking. Your employer may have told you that you have a certain number of days to sign — but what does the law actually require? And what happens if you need more time?
The answer depends primarily on your age and your situation. Here's what you need to know.
If you are 40 years of age or older, federal law — specifically the Older Workers Benefit Protection Act (OWBPA), which is part of the Age Discrimination in Employment Act (ADEA) — requires that your employer give you at least 21 days to consider any severance agreement that includes a waiver of age discrimination claims.
This 21-day period is a minimum, not a maximum. You are entitled to the full 21 days. Your employer cannot legally pressure you to sign earlier, though you may voluntarily choose to sign before the deadline.
Important: If you sign before the 21 days are up, you do not waive the 7-day revocation period described below. Both protections apply regardless of when you sign.
If your termination was part of a group layoff — meaning multiple employees were let go at the same time as part of a reduction in force — the review period extends to 45 days. Additionally, in a group layoff situation, your employer is required to provide you with information about the ages and job titles of all employees who were selected and not selected for the layoff.
This extended period and additional disclosure requirement exists to help you evaluate whether age discrimination may have played a role in the selection process.
Even after you sign a severance agreement, you have a 7-day revocation period during which you can change your mind and cancel the agreement. This is another federal protection under the OWBPA that cannot be waived or shortened by your employer.
The agreement does not become effective — and you will not receive any severance payment — until this 7-day revocation period has passed. This is worth knowing: if you sign on the day you receive the agreement and then have second thoughts, you have 7 full days to back out without penalty.
If you are under 40 years old, the ADEA and OWBPA protections described above do not apply to you. There is no federally mandated minimum review period for employees under 40.
That said, many employers provide a review period voluntarily — typically 5 to 14 days — regardless of age. Your agreement should specify the deadline. If it doesn't, or if the deadline feels unreasonably short, you can ask your employer for more time. Employers often grant extension requests, especially when the request is made professionally and in good faith.
Your employer cannot legally coerce you into signing before your review period expires. However, they can:
What they cannot do is threaten you, misrepresent your rights, or condition your COBRA continuation coverage on how quickly you sign.
Your review period exists for a reason. Use it. Here's how to make the most of it:
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