What Do Severance Package Laws Cover?


Quick Answer

Severance package laws cover issues such as an employer having to offer continued health benefits after the employee has separated from the company, says LegalMatch. Other issues included in severance package laws include mandated severance pay when employees lose their job due to company closure, states FindLaw.

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Full Answer

Federal and state laws mandate that an employer must offer continued health benefits to an employee when he leaves his job, explains LegalMatch. These laws are written under the Consolidated Omnibus Budget Reconciliation Act, better known as COBRA. The employee has to pay the costs of coverage, and usually, the employer specifies how long coverage is provided.

In the majority of situations, severance pay laws do not require employers offer any type of severance package to terminated employees, according to LegalMatch. However, there may be instances when employers are legally required to offer a severance package, such as when there is a written contract that calls for a severance package at the time an employee departs employment of a company or a written promise in an employee handbook. An oral promise by an employer to an employee that the employee is going to receive a severance package upon termination may also be legally enforced.

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