New York Severance Agreements

First, the clock

Deadlines on a severance agreement come from statutes, not from your employer’s convenience, and they are not all the same.

• 21 days to consider, if you are 40 or older. Federal law requires it for a valid release of an age claim — 45 days if you are being let go as part of a group (29 U.S.C. § 626(f)(1)(F)). You may sign early if you want to, but the employer may not pressure you to by threatening to withdraw the offer or by giving better terms to people who sign fast (29 C.F.R. § 1625.22(e)(6)).
• 7 days to revoke, always. If the agreement releases an age claim, you have at least seven days after signing to change your mind, and the agreement does not take effect until they pass. This period cannot be shortened by agreement or otherwise (29 C.F.R. § 1625.22(e)(5)).
• A separate 21 days and 7 days if the agreement has a confidentiality term and your situation involves discrimination, harassment or retaliation. New York adds its own clocks here (General Obligations Law § 5-336). These run at any age.
• A material change restarts the clock. If the employer changes the offer in a material way, the 21 or 45 days begin again, unless you agree otherwise (29 C.F.R. § 1625.22(e)(4)).

If nobody gave you a consideration period and you are over 40, that is not a technicality. It means the release does not waive your age claim.

What am I actually giving up?

Almost always: every claim you have against the company as of the day you sign. That usually includes discrimination, harassment and retaliation claims, contract claims, unpaid commissions and bonuses, defamation, and anything else that has already happened. What it cannot include is a claim that has not arisen yet — a release cannot waive rights arising after you sign it (§ 626(f)(1)(C)).

Two things are commonly misread. A release gives up your right to recover; it does not and cannot give up your right to file a charge with an agency or to cooperate with one. And a general release does not usually end your own continuing obligations — confidentiality, invention assignment, and any restrictive covenants you already signed generally survive.

Which claims cannot be released at all?

Your right to file a charge, or to talk to an agency

No waiver may stop you from filing with the EEOC or taking part in its investigation, and no agreement may penalize you for doing so (29 U.S.C. § 626(f)(4); 29 C.F.R. § 1625.22(i)(2)–(3)). New York adds the same protection for state and local agencies, and for speaking to law enforcement, the Attorney General or your own lawyer (Gen. Oblig. Law § 5-336(1)(c), (2)). You can still give up the money.

Unemployment benefits

“No agreement by an employee to waive his rights under this article shall be valid” (Labor Law § 595(1)). Benefits also cannot be assigned or released, and that exemption itself cannot be waived.

Workers’ compensation

“No agreement or release ... by an employee to waive his right to compensation under this chapter shall be valid” (Workers’ Comp. Law § 32). A settlement of a filed claim requires Workers’ Compensation Board approval; a general release in a severance agreement does not reach a comp claim at all.

Vested pension benefits

Accrued pension benefits are non-forfeitable and cannot be assigned or alienated (29 U.S.C. §§ 1053(a), 1056(d)(1)). Note the limit: this protects the benefit, not an ERISA lawsuit, and it does not cover severance plans or other welfare plans.

Some wage claims, partly

You cannot waive liquidated damages under the federal Fair Labor Standards Act, and you cannot privately settle whether the Act covers you at all (Brooklyn Savings Bank; Cheeks, 796 F.3d at 203). New York wage claims are weaker here: there is no New York rule requiring a court to approve a private wage settlement, so a release generally does reach them.

Notice what is not on this list: a claim under the New York WARN Act. A general release will extinguish it, and no court or agency has to approve that. If you were laid off in a group, value the WARN claim before you sign, not after.

The wage entry cuts both ways. Because no court has to approve a settlement of New York Labor Law claims, a wage dispute can be resolved privately — with confidentiality, with a general release, and with nothing filed for a judge to review — and that privacy is often worth enough to an employer to make a deal possible. A federal Fair Labor Standards Act claim filed in federal court changes that: a stipulated dismissal settling it takes effect only with the approval of the court or the Department of Labor, and on that review courts regularly strike highly restrictive confidentiality provisions and overbroad releases (Cheeks, 796 F.3d at 206). Two limits on the private route. A case brought on behalf of a class “shall not be dismissed, discontinued, or compromised without the approval of the court,” with notice to the class, even if no class was ever certified (CPLR 908; Desrosiers v. Perry Ellis Menswear, LLC, 30 N.Y.3d 488 (2017)). And in a federal case that pleads both, whether the New York claims may be settled in a separate agreement the judge does not review is up to the judge: some have accepted it, others have required both agreements to be submitted.

If you are 40 or older, the rules are stricter — and the employer usually pays for getting them wrong

A release of an age claim is valid only if it meets every requirement in 29 U.S.C. § 626(f)(1): it is written to be understood, it refers specifically to age discrimination rights, it does not waive future claims, it gives you consideration beyond anything you were already entitled to, it advises you in writing to consult a lawyer, and it gives you the 21 or 45 days and the 7-day revocation. In a group layoff, the employer must also give you the job titles and ages of everyone eligible or selected, and the ages of everyone in the same unit who was not (§ 626(f)(1)(H)). The employer bears the burden of proving the waiver was knowing and voluntary (§ 626(f)(3)).

If the release fails any of that, it does not waive your age claim — and you do not have to give the money back to sue. Oubre holds the release unenforceable as to the age claim “irrespective of the validity of the contract as to other claims,” and the regulations go further: no agreement may require you to tender back consideration or pay the employer’s fees as the price of challenging it (29 C.F.R. § 1625.23(b)).

For every other federal claim — race, sex, disability, national origin, retaliation — there is no statutory checklist. Courts ask whether the waiver was knowing and voluntary on the totality of the circumstances, weighing your education and experience, how long you had the agreement, your role in setting the terms, its clarity, whether you consulted a lawyer, whether the money exceeded what you were already owed, and whether the employer encouraged you to get advice (Livingston).

Confidentiality and non-disparagement

If the factual foundation of your situation involves discrimination, harassment or retaliation, New York restricts what the employer may ask for. A confidentiality term is permitted only if secrecy is your preference, that preference must be put in a signed agreement, the term must be in plain English, you get up to 21 days to consider it, and you have at least 7 days to revoke (Gen. Oblig. Law § 5-336(1)).

The part most people miss is subdivision 3. No release is enforceable if the agreement resolving the claim requires you to pay liquidated damages for breaching a confidentiality or non-disparagement clause, requires you to forfeit the money for breaching one, or contains “any affirmative statement, assertion, or disclaimer by the complainant that the complainant was not in fact subject to unlawful discrimination.” That last one voids the boilerplate line saying you were never discriminated against.

Separately, a confidentiality or non-disparagement clause agreed to before a sexual assault or sexual harassment dispute arose is not judicially enforceable at all (42 U.S.C. § 19403(a)).

And if you are not a supervisor or manager, federal labor law may reach the clause even with no discrimination in the picture: a severance agreement whose confidentiality and non-disparagement terms would tend to restrain employees’ rights under Section 7 of the National Labor Relations Act is unlawful, and merely offering it violates the Act (McLaren Macomb). That decision is under active attack — see the open questions.

Non-competes and non-solicits

New York still has no statute banning non-competes. A 2023 ban passed both houses and was vetoed in December 2023; successor bills have passed the Senate but not the Assembly. So the question remains a common-law one.

A restraint is reasonable “only if it: (1) is no greater than is required for the protection of the legitimate interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public” (BDO Seidman). The employer’s legitimate interest is narrower than most agreements claim: it reaches clients you served because the employer assigned them to you, not clients you never served and not clients you brought in yourself.

If the agreement instead says you keep the money only so long as you do not compete, that is the employee-choice doctrine, and it has a limit. An employer that fired you without cause cannot enforce a forfeiture against you, because doing so “destroys the mutuality of obligation on which the covenant rests” (Post). If you resigned, you can still escape the doctrine by showing constructive discharge — but that is the demanding federal standard, not merely a worse job (Morris).

One sector has its own statute: broadcast employees cannot be required to accept post-employment restrictions at all, and a violation carries damages, fees and costs (Labor Law § 202-k).

Will severance cost me unemployment benefits?

Often not — and the answer usually turns on when you are paid rather than how much.

Severance counts against benefits only for weeks inside the “dismissal period,” and only if your weekly severance exceeds a threshold with two parts (Labor Law § 591(6)(a)):

The maximum weekly benefit rate

$869 per week as of September 2026. This is the statewide cap set by Labor Law § 590(5)(a), not your own benefit rate. It changes on Monday, October 5, 2026 — see the note below.

Plus your partial benefit credit

The greater of half your own weekly benefit rate or $100, rounded up to the next dollar (§ 525).

So a worker whose own weekly benefit rate is $500 has a partial benefit credit of $250, and severance starts to cost benefits only above $1,119 a week. At a $300 benefit rate the threshold is $1,019. A lump sum is not ignored: it is spread over weeks from the day after your last day, using your actual weekly earnings (§ 591(6)(c)).

The exception is the one to remember. If the first severance payment is made more than thirty days after your last day of employment, the whole subdivision does not apply — the severance does not reduce your benefits at all, whatever the amount (§ 591(6)(d)). That is a term employers will often agree to, because it costs them nothing. The Third Department applied that rule in Matter of Schachter (Commissioner of Labor), holding that because the first installment came within thirty days, the claimant was ineligible until the weekly allocation fell below the maximum rate.

One warning from the same case. The claimant there certified on his benefits application that he would receive no lump-sum dismissal pay, then signed his severance agreement a few weeks later. That turned an ordinary offset into a recoverable overpayment plus a penalty and eight forfeit days. If a severance offer is pending, say so when you apply.

Accrued vacation and other leave paid out at separation is not “dismissal pay” and does not count (§ 591(6)(b)). Neither does money paid because the employer violated the WARN Act: those payments “shall not be construed as remuneration,” and benefits “may not be denied or reduced” because you received them (§ 860-g(3)).

Two notes on currency. The $869 maximum is in force until the first Monday of October 2026, when § 590(5)(a) replaces it with fifty percent of the state average weekly wage — a figure the Department of Labor computes, and one that § 590(5)(b) can suspend if the unemployment trust fund missed a statutory balance test. Check the current rate with the New York State Department of Labor. Separately, the 2025 amendment added the words “the claimant’s” before “maximum weekly benefit rate,” and no court has yet construed the change. The earlier text read simply “the maximum weekly benefit rate,” and the Third Department applied it as a fixed statewide figure in Matter of Schachter (Commissioner of Labor). We read the threshold as the statewide cap, which is how it is stated above.

The weeks between your last day and signing

There is usually a gap between the day your job ends and the day a severance agreement is signed — days or weeks spent reading it, negotiating it, or waiting on the employer. You can claim unemployment during that gap. What happens to those weeks once severance arrives depends almost entirely on how the payment is structured, and that is something you can often negotiate.

First payment more than thirty days after your last day

The dismissal-pay rules do not apply at all (§ 591(6)(d)). Weeks you already collected are untouched, and so are the weeks that follow. This is the structure to ask for.

First payment within thirty days — including a lump sum

The payment is allocated backward across weeks starting the day after your last day of employment (§ 591(6)(c)). Weeks you already collected benefits for can become weeks you were ineligible for. In Matter of Schachter (Commissioner of Labor), one installment inside the thirty days pulled the entire payment into the calculation.

A small first installment inside thirty days

Do not assume a token payment is harmless. No decision addresses whether a nominal first installment brings the whole severance within the rule, and Schachter treated the first installment as controlling. If the goal is to stay outside § 591(6), the first payment of any kind should come after day thirty.

Salary continuation, or a stated dismissal period

The statute lets a dismissal agreement designate the “dismissal period” the payments are attributed to (§ 591(6)(c)). That is a real drafting lever for installment or salary-continuation severance. It is weaker for a lump sum, because the same subdivision separately directs that a lump sum be allocated from the day after the last day of employment. We have found no decision or Department ruling on how the two provisions interact.

Do you have to pay back benefits you already received? Not necessarily, and the answer turns on what you told the Department. Benefits already paid are protected from a later redetermination if you accepted them in good faith and made no false statement or concealed no pertinent fact — unless the new determination “shall be based upon a retroactive payment of remuneration” (§ 597(4)). Severance is not “remuneration” under the unemployment law: “Remuneration does not include ... [d]ismissal payments” (§ 517(2)(h)), and the Third Department has said so directly (Matter of Woody (Roberts), 139 A.D.2d at 880). So a claimant who told the truth has a strong argument that a later severance payment cannot take back benefits already received. No court has decided that question, so treat it as an argument, not a guarantee.

That protection disappears if there was a false statement — and a false statement need not be deliberate. The Third Department has held recovery available “even if the misrepresentation is unintentional” (Matter of Schachter (Commissioner of Labor), quoting Matter of Holst, 247 A.D.3d 1453, 1454 (3d Dep’t 2026)). A willful false statement is worse: under the current statute it forfeits benefits for between one and twenty effective weeks, plus a civil penalty of the greater of $100 or fifteen percent of the overpayment (§ 594(1), (4)). The Department generally has one year to revisit a determination absent fraud or willful misrepresentation (§ 597(3)).

The practical sequence, then: file promptly; disclose any pending severance offer on the application; negotiate the first payment past day thirty; and if an installment structure is used, have the agreement designate the dismissal period.

File the unemployment claim as soon as you can

This is practice advice rather than a rule, but the mechanics behind it are worth knowing, because waiting costs money in three separate ways.

A claim reaches back only to the start of the week you file it. A claim is deemed filed as of the first day of your unemployment in the statutory week in which you file (12 NYCRR 473.1(b)). File on Friday and it still reaches Monday; wait until next week and the earlier week is simply gone. Going back further is possible but discretionary: the Commissioner “may” excuse a late filing on a showing of good cause (12 NYCRR 473.1(g)). That is a favor to ask for, not a right.

The first week you claim pays nothing. New York still has a waiting period: you cannot accumulate weeks for benefit payments “until [you] ha[ve] accumulated a waiting period of one effective week” (Labor Law § 590(7)). An “effective week” is one in which you perform no services for pay, or part-time work paying less than your benefit rate plus your partial benefit credit (§ 523). So the first qualifying week is unpaid no matter when you file — which is an argument for starting the clock early, not for putting it off.

Certification is weekly and looks backward. You certify after each statutory week, within a seven-day window, and missing that window forfeits the week unless the Commissioner excuses it for good cause (12 NYCRR 473.2(a), (c), (e)). Benefits can also be withheld outright while the Department resolves why your employment ended (12 NYCRR 473.1(c)(2)). Beyond that structural floor, in our experience the gap between filing and the first payment arriving is often considerably longer than the rules alone would suggest. There is no statutory deadline requiring the Department to pay by a particular date.

One question we cannot answer from the authorities: whether the waiting week runs while you are ineligible because of severance under § 591(6), or only once that ineligibility ends. If it runs concurrently, filing early is worth an extra paid week at the far end. We have found no statute, regulation, Appeal Board decision or reported case addressing it, and the 2025 amendment deleted the clause that used to speak to it. If this matters to your situation, ask the Department of Labor in writing.

Tell them about the severance when you apply

This is the practical lesson of Matter of Schachter (Commissioner of Labor), and it is the cheapest mistake on this page to avoid.

The claimant there filed for benefits and certified that he would not be receiving a lump-sum dismissal payment. He signed his severance agreement a few weeks later. Because the first installment landed within thirty days of his last day, § 591(6) applied, the payment was allocated back across the weeks he had already claimed, and what would otherwise have been an ordinary offset became a recoverable overpayment, a monetary penalty, and eight forfeit days — all affirmed on appeal. That was under the former statute, which counted forfeited days; the current one counts forfeited weeks, between one and twenty (§ 594(1)). He argued the case himself.

So: if a severance offer is on the table, or you think one might be, say so when you apply and correct the record as soon as the terms are settled. Disclosing it may delay your benefits while the Department works out the allocation. Not disclosing it converts a timing problem into a finding that you misrepresented something, which costs far more and follows you into the next claim.

If you were laid off in a group: the WARN claim you may be signing away

New York’s WARN Act applies to employers with 50 or more employees, and is triggered by a mass layoff of at least 25 employees amounting to a third of the workforce at a site, or of 250 employees regardless of proportion (Labor Law § 860-a(3)–(4)). It requires 90 days’ written notice — longer than the federal Act’s 60.

If the employer failed to give it, you are owed back pay at your regular rate plus the value of your benefits, for the period of the violation, capped at 60 days (§ 860-g(1)–(2)). You have six years to bring it, and a prevailing plaintiff may be awarded attorney’s fees (§ 860-g(7)).

Here is the part that matters when severance is on the table. The employer’s WARN liability is reduced by “any voluntary and unconditional payments made by the employer to the employee that were not required to satisfy any legal obligation” (§ 860-g(4)(b)). Severance conditioned on signing a release is not unconditional, and severance owed under a plan or contract is required by a legal obligation. So there is a strong argument that release-conditioned severance does not offset WARN liability at all — while the release itself will extinguish the WARN claim. Work out what the WARN claim is worth before you sign.

What is actually negotiable?

More than the number, and usually with better odds. In rough order of how often employers agree:

• The payment date. Pushing the first payment past thirty days after your last day can preserve your unemployment benefits outright — both the weeks you collect going forward and the ones you already collected while the agreement was being negotiated — at no cost to the employer. See the weeks between your last day and signing.
• A neutral reference and an agreed departure statement. Cheap for them, valuable to you.
• Mutual non-disparagement. If they want it from you, ask for it from them, and ask who at the company it binds.
• Carve-outs. Your right to file with an agency, to respond truthfully to a subpoena, to discuss wages and terms with coworkers, and to enforce the agreement itself.
• COBRA contribution. Employer-paid continuation for the severance period is a standard ask.
• Narrowing the restrictive covenants — by time, by geography, by the specific clients you actually served.
• Removing the “no discrimination occurred” recital — which, in an agreement resolving a discrimination claim, may void the entire release anyway.
• Accelerated or pro-rated equity vesting, and the exercise window on vested options.
• The number. Last on this list because it is the term employers defend hardest and the one where you need the most leverage.

What to gather before you talk to a lawyer

• The agreement itself, and the date and time you received it.
• Any group-layoff disclosure listing job titles and ages.
• Your offer letter, employment agreement, and any severance plan or policy.
• Every restrictive covenant you have ever signed, including ones in equity award documents.
• Recent pay stubs, your commission or bonus plan, and any unpaid amounts.
• Equity grant agreements and vesting schedules.
• Your last day of actual work, and the date you were told.
• Anything in writing about why you were selected, and who else was let go.
• The company’s exact legal name, from a pay stub or the agreement.