California Severance Agreement Requirements: What the Law Makes Your Employer Include

Short answer: California does not make your employer offer severance. Once one is offered, the law controls the paperwork. If your employer has five or more employees, it must notify you that you may consult an attorney and give you at least five business days. The agreement cannot gag you about unlawful conduct at work, and it cannot take your unpaid wages, your workers' compensation claim, your unemployment benefits, or your right to file a charge with the EEOC.

At a glance

• No California statute requires severance pay. What the law controls is the paperwork attached to it.
• Under Government Code section 12964.5(b)(4), an employer with five or more employees who offers you a separation agreement must notify you of your right to consult an attorney and give you at least five business days to do so.
• If you are 40 or older, the agreement releases an age claim, and your employer has twenty or more employees, federal law adds more: 21 days to consider it, 45 days if it is part of a group program, and 7 days afterwards to change your mind.
• Those federal windows are age law. A 34-year-old gets none of them.
• Some rights survive whatever you sign. Unpaid wages, workers' compensation, unemployment benefits and the right to file a charge are on that list.
• When a clause breaks one of these rules, the usual result is that the clause dies and the rest of the agreement lives.

Does California law require your employer to offer severance?

No. There is no California statute that entitles you to a severance payment when your job ends.

What the Labor Code does require is your final pay. Labor Code section 201(a) says that "If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately." That is wages you already earned, and severance is a separate thing. If your employer willfully fails to pay those earned wages, section 203(a) turns your daily pay into a penalty, for up to 30 days. The statute says "willfully", so being a few days late is not automatically enough. Our guide to the California final paycheck law covers that clock in detail.

One law comes close to looking like required severance, and is not. Under the Cal/WARN Act, Labor Code section 1401(a), an employer cannot order a mass layoff, relocation or termination at a covered establishment without 60 days' written notice. Break that and section 1402 creates back-pay liability, capped at 60 days. Section 1402(c)(2) then reduces that liability by "Any voluntary and unconditional payments made by the employer to the employee that were not required to satisfy any legal obligation." That is one reason an employer facing notice exposure prefers to route the money through a severance agreement.

There is a floor on what the payment can be made of. The federal Equal Employment Opportunity Commission (EEOC) puts it plainly: the consideration for a waiver "cannot simply be a pension benefit or payment for earned vacation or sick leave to which the employee is already entitled". You cannot be asked to sign away claims in exchange for money that was already yours.

For what a normal package actually looks like, see our breakdown of how much severance pay is normal in California.

How long does the law give you to read it?

Two separate clocks can run on the same document, and the one people have heard of is usually the one that does not apply to them. The law calls this window the consideration period.

The California clock. Government Code section 12964.5(b)(4) requires an employer offering "an agreement related to that employee's separation from employment as provided in this subdivision" to "notify the employee that the employee has a right to consult an attorney regarding the agreement" and to provide "a reasonable time period of not less than five business days in which to do so." Read the subdivision as a whole and that class is broad: paragraph (b)(1)(A) speaks of "any agreement related to an employee's separation from employment", and paragraph (b)(3) uses the same words again. The one express exception is the negotiated settlement of a claim you had already filed, covered further down this page. You may sign sooner, but only if that decision is "knowing and voluntary and is not induced by the employer through fraud, misrepresentation, or a threat to withdraw or alter the offer prior to the expiration of the reasonable time period."

That section sits inside the Fair Employment and Housing Act, whose definition at Government Code section 12926(d) "includes any person regularly employing five or more persons". The same subdivision excludes "a religious association or corporation not organized for private profit". A four-person employer, and a religious non-profit of any size, may therefore sit outside this rule.

The federal clock is age law only. The Older Workers Benefit Protection Act (OWBPA) amended the Age Discrimination in Employment Act (ADEA) and governs waivers of age claims. Under 29 U.S.C. section 626(f)(1)(F), a worker 40 or older must get "a period of at least 21 days within which to consider the agreement", or "at least 45 days" where the waiver is requested in connection with "an exit incentive or other employment termination program offered to a group or class of employees". Section 626(f)(1)(G) then adds "a period of at least 7 days following the execution of such agreement" in which you may revoke, and the agreement "shall not become effective or enforceable until the revocation period has expired". The regulation at 29 C.F.R. 1625.22(e)(5) is blunt about that last one: "The 7 day revocation period cannot be shortened by the parties, by agreement or otherwise."

What decides 45 days rather than 21 is a group or class program, not how many people were let go on the same day. Employer size matters in a different way. The ADEA reaches an employer with "twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year", so below that size none of these federal windows apply at all.

One detail in the regulations matters if you counter-offer. Under 29 C.F.R. 1625.22(e)(4), "Material changes to the final offer restart the running of the 21 or 45 day period". The same paragraph then allows the parties to agree that changes do not restart it, and many agreements contain exactly that clause.

Nothing in California law requires your employer to pay for your legal review, to extend the five days when you ask, or to find you a lawyer. If you want to know what a review costs and what it covers, we set that out in what a severance agreement review costs. For what to do with the days themselves, work through our 7-step checklist after a California layoff.

What must the agreement actually say?

The statutes spell out what the document itself has to contain.

A carve-out telling you that you can still speak. Where a separation agreement restricts disclosure, Government Code section 12964.5(b)(1)(B) requires it to include, "in substantial form", this language: Nothing in this agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful. "In substantial form" lets your employer vary the wording. It does not let your employer drop the substance.

A written instruction to see a lawyer, if you are releasing an age claim. Under 29 U.S.C. section 626(f)(1)(E), the agreement must show that "the individual is advised in writing to consult with an attorney prior to executing the agreement". California's parallel duty under section 12964.5(b)(4) is to notify you and give you time. Neither requires you to actually see a lawyer.

The ADEA by name, and plain language. Section 626(f)(1)(A) requires the waiver to be "written in a manner calculated to be understood by such individual", and 626(f)(1)(B) requires that "the waiver specifically refers to rights or claims arising under this chapter". The regulation at 29 C.F.R. 1625.22 adds that "The entire waiver agreement must be in writing", that it "must refer to the Age Discrimination in Employment Act (ADEA) by name in connection with the waiver", and that it "must not have the effect of misleading, misinforming, or failing to inform participants".

If a group layoff put you in front of an age waiver, your employer also owes you a list of job titles and ages. We cover that document on its own page: the ages list your employer owes you in a group layoff.

One rule cuts the other way, so check it before you assume a clause is dead. Under section 12964.5(e), the law "does not prohibit the entry or enforcement of a provision in any agreement that precludes the disclosure of the amount paid in a severance agreement." The number can be confidential. The conduct cannot.

What can a severance agreement never take from you?

Some rights are not yours to trade, because the law that created them was written for a public reason rather than for your private benefit. Civil Code section 3513 is the engine behind the whole list: "Any one may waive the advantage of a law intended solely for their benefit. But a law established for a public reason cannot be contravened by a private agreement."

Surviving a waiver is not the same as qualifying. Whether the EDD actually pays you turns on why your job ended, which we cover in what disqualifies you from unemployment in California.

Two of those protections come with a caution.

Filing is not the same as collecting. The regulation at 29 C.F.R. 1625.22(i)(3) bars any provision "imposing any condition precedent, any penalty, or any other limitation adversely affecting any individual's right" to file a charge or take part in an investigation. That is what kills a clause demanding you hand the money back before you complain. But a valid release can still bar you from personally recovering money on the claim you released. The right the law protects here is the right to file.

Whistleblower protection works differently from the rest. Labor Code section 1102.5 protects you from retaliation for reporting what you reasonably believe is a legal violation, and section 1102.5(j) allows attorney's fees to a successful plaintiff. The section does not contain its own non-waiver clause. Its resistance to a private waiver comes from Civil Code 3513 rather than from its own wording.

Can it stop you talking about harassment or discrimination?

No. The law does not let it silence you about the conduct itself.

Government Code section 12964.5(b)(1)(A) makes it "an unlawful employment practice for an employer or former employer to include in any agreement related to an employee's separation from employment any provision that prohibits the disclosure of information about unlawful acts in the workplace." Section 12964.5(c) defines that phrase broadly, reaching "information pertaining to harassment or discrimination or any other conduct that the employee has reasonable cause to believe is unlawful." That covers race, disability, age and retaliation, not only sexual harassment.

The federal Speak Out Act covers a narrower subject. It reaches sexual assault and sexual harassment disputes only, and within that subject a non-disclosure or non-disparagement clause "agreed to before the dispute arises" is not "judicially enforceable". Whether your clause counts as pre-dispute turns on whether that dispute had already arisen when you signed, so it can still reach a clause signed before you raised anything. California's rule carries no pre-dispute limit and covers far more ground than sexual harassment. We look at both in detail in our guide to non-disclosure agreements after SB 331 and the Speak Out Act.

What happens if a clause in your agreement is unlawful?

Most people guess wrong here, and the answer depends on which rule was broken.

Usually the clause falls and the agreement stands. Section 12964.5(b)(2) says "Any provision in violation of paragraph (1) is against public policy and shall be unenforceable." That tracks the general contract rule in Civil Code section 1599: where a contract has lawful and unlawful objects, "the contract is void as to the latter and valid as to the rest." Strike the gag, keep the money, keep the release.

Sometimes the release itself falls. Labor Code 206.5(a) is written differently. A release of wage claims taken in violation of it is "null and void as between the employer and the employee". So is a waiver of the expense-indemnity article under Labor Code 2804.

An age waiver is all or nothing. Fail any one of the OWBPA requirements and the age waiver is invalid and unenforceable in its entirety. Section 626(f)(3) also puts the burden on the employer: "the party asserting the validity of a waiver shall have the burden of proving in a court of competent jurisdiction that a waiver was knowing and voluntary."

There is one more outer limit. Civil Code section 1668 provides that contracts which "exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law" are against the policy of the law.

For what each clause in your document is doing, clause by clause, read our guide to the general release in your severance.

Where don't these protections reach?

Some of these protections stop short of where you would expect them to.

A settlement of a claim you already filed is treated differently. Section 12964.5(d)(1) says the section "does not apply to a negotiated settlement agreement to resolve an underlying claim under this part that has been filed by an employee in court, before an administrative agency, in an alternative dispute resolution forum, or through an employer's internal complaint process." Federal law has a similar carve-out, with a narrower trigger. Under 29 U.S.C. 626(f)(2) it reaches "A waiver in settlement of a charge filed with the Equal Employment Opportunity Commission, or an action filed in court", and such a waiver only needs to meet subparagraphs (A) through (E) plus "a reasonable period of time". The 21 or 45 days, the 7-day revocation and the ages list drop away. The difference matters: California's carve-out also covers a complaint you made through your employer's own internal process, and the federal one does not. A plain severance offered at a layoff gets more protection than a negotiated settlement does.

A no-rehire clause is often lawful. Code of Civil Procedure section 1002.5 bars a no-rehire provision in "An agreement to settle an employment dispute", but only where you are an "aggrieved person", defined in section 1002.5(c)(1) as someone who "in good faith, has filed a claim against the person's employer in court, before an administrative agency, in an alternative dispute resolution forum, or through the employer's internal complaint process". A complaint to your own HR department counts. If you never raised a claim in any of those four places, an ordinary severance agreement is not settling a dispute, and a no-rehire clause in it is not void under that section.

There is no form requirement and no translation right. California does not prescribe a form, a signature block or a filing for a severance agreement. Civil Code section 1632, which requires contracts to be translated for people who negotiate in Spanish, Chinese, Tagalog, Vietnamese or Korean, applies to a closed list of transaction types. Employment and severance agreements are not on it.

Ready to talk it through? Our severance agreement review tells you what you are actually being asked to give up, before the clock runs out.

How long do you have to act?

There is no single deadline for challenging a severance agreement, and anyone who gives you one number is compressing several different clocks.

• Seven days to revoke. If you are 40 or older and signed a waiver of age claims at an employer with twenty or more employees, 29 U.S.C. 626(f)(1)(G) gives you at least 7 days to take it back, and that period cannot be shortened.
• Three years to file with the state. Government Code section 12960(e)(5) gives you three years from the unlawful practice to file with the Civil Rights Department (CRD) (formerly DFEH).
• Then one more year to sue. Government Code 12965(c)(1)(D) provides that after a right-to-sue notice you have "one year from the date of that notice" to bring a civil action. Miss either deadline and the claim is gone.
• 300 days with the EEOC. Under 42 U.S.C. 2000e-5(e)(1) the federal window is 180 days, extended to 300 where the state has its own enforcement agency. California does, so the longer period applies.
• Wage claims run on their own clock. Labor Code 203(b) ties the waiting-time penalty to the limitations period for the underlying wages. Our final paycheck guide sets out that window.

Attacking the contract itself, on grounds such as fraud, duress or mistake, runs on different deadlines again, and they vary with the theory.

Deadlines here can run earlier than people expect, and a missed one ends a claim that was otherwise sound. If you are inside any of these windows, speak to a lawyer now rather than after the date passes.

Frequently asked questions

Does California require employers to give severance pay?

No. No California statute requires severance. Your employer must pay wages you already earned, on the deadlines in Labor Code 201 to 203, but severance itself is a negotiated payment. What the law regulates is the agreement attached to it.

How many days do I have to review a severance agreement in California?

At least five business days, under Government Code 12964.5(b)(4), together with notice of your right to consult an attorney. That rule covers employers with five or more employees. If you are 40 or older, releasing an age claim, and your employer has twenty or more employees, federal law gives you 21 days instead, or 45 days in a group program, plus 7 days afterwards to revoke.

What makes a severance agreement invalid in California?

It depends on the rule broken. A gag clause covering unlawful conduct is unenforceable while the rest of the agreement stands. A release of unpaid wages taken in violation of Labor Code 206.5 is null and void. An age waiver that misses any OWBPA requirement fails in full.

Can my employer stop me from talking about what happened?

Not about conduct you reasonably believe was unlawful. Government Code 12964.5 makes such a provision an unlawful employment practice and requires the agreement to spell out that you may still speak. Your employer can require you to keep the settlement amount confidential.

Can I still file a charge with the EEOC after signing?

Yes. Under 29 U.S.C. 626(f)(4) no waiver may be used to justify interfering with your right to file a charge or take part in an investigation, and 29 C.F.R. 1625.22(i)(3) also bars penalties aimed at people who do. A valid release may still prevent you from personally recovering money on the claim you released.

Do I have to give the money back to challenge the agreement?

Not for an age claim. The EEOC's position is that an employee need not return severance before bringing an age discrimination claim, although your employer may offset what it paid against any award you win. For claims under other statutes, the law is less settled.

Is a no-rehire clause legal in a California severance agreement?

Often, yes. Code of Civil Procedure 1002.5 only bars a no-rehire provision in an agreement settling an employment dispute where you had already raised a claim in good faith, in court, before an agency, in an alternative dispute resolution forum, or through your employer's internal complaint process. A severance agreement signed at a layoff, where you raised nothing, is usually outside that section.

The Law Offices of Jonathan J. Delshad is a Los Angeles based employment law firm representing employees across California in wrongful termination, discrimination, retaliation, harassment, and wage and hour matters. Representing employees is the core of the firm's practice. Mr. Delshad serves as Editor-in-Chief of the California Wrongful Termination Law Review and trained at Latham & Watkins. Recognition includes Super Lawyers (2022 to 2027), Best Lawyers (since 2017), and an Avvo 10.0 "Superb" rating. Reviewed for California employment law accuracy. Last updated: September 18, 2026.

Attorney advertising. This article is educational only and is not legal advice. Reading it does not create an attorney-client relationship, which exists only under a signed engagement agreement. Every case is different, and outcomes depend on the specific facts. Deadlines can run early, so consult a lawyer promptly about your situation.