Connecticut Severance Pay Laws (2026): Is Severance Required?

No. We found no Connecticut statute that requires an employer to pay severance, and no Connecticut WARN Act. The Connecticut statute that names severance is the unemployment law: under Conn. Gen. Stat. 31-236(a)(4)(B), you are not eligible for unemployment benefits in any week for which you have received or are about to receive severance or separation pay.

Severance in Connecticut comes from a promise in a contract, handbook, plan or separation agreement, and the state's courts enforce that promise as a contract (Mace v. Conde Nast Publications, Inc., 155 Conn. 680 (1967)). For how other states handle severance and the full federal rules, see our severance pay laws by state guide.

Information last verified on October 7, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Connecticut law on severance pay: the wage payment statutes in chapter 558 of the Connecticut General Statutes (31-71a to 31-76k), the unemployment rule in 31-236(a)(4)(B), and the Connecticut case law on promised severance, with short notes on the federal rules that apply in Connecticut. It does not cover when your last regular paycheck is due; see Connecticut final paycheck laws. It does not cover benefit amounts or how to file for unemployment; see Connecticut unemployment benefits.

Is severance pay required in Connecticut?

No Connecticut statute we found requires severance. We read the full text of chapter 557 (Employment Regulation), chapter 558 (Wages) and chapter 567 (Unemployment Compensation) of the General Statutes on the General Assembly's website. The word "severance" appears only in the unemployment chapter, in the rule that reduces benefits, not in any rule that requires payment.

We also checked the General Assembly's bills-by-subject index for 2025 and 2026. It lists no bills under "Plant closings and relocations" or "Severance" in either session. This finding rests on those three chapters and the subject indexes; we did not search every other chapter of Title 31 or the state-employee statutes.

Federal law does not fill the gap. The U.S. Department of Labor says the Fair Labor Standards Act does not require severance pay and that severance is a matter of agreement between employer and employee. Whether your employer could end your job in the first place is a separate question, covered on our Connecticut at-will employment page.

Does Connecticut have a WARN Act?

We found no Connecticut WARN Act. Chapters 557 and 558 contain no mass-layoff notice or back-pay rule, and the Connecticut Department of Labor's WARN page describes the federal WARN Act as the governing law. Under that page, WARN notices go to the local chief elected official, the Department's Dislocated Worker Unit, and the union representing affected employees, or each employee if there is no union.

Federal WARN covers employers with 100 or more employees, not counting part-time workers (or 100 or more employees, counting part-time workers, who together work at least 4,000 hours a week, not counting overtime), and requires 60 days of written notice before a covered plant closing or mass layoff. An employer that skips it owes back pay and benefits for each day of the violation, up to 60 days and no more than half the days the employee worked there, and only a federal court enforces it (29 U.S.C. 2101-2104). Our severance pay laws guide covers the federal thresholds and exceptions.

The repealed plant-closing health insurance rule

Older articles may say Connecticut employers must keep group health insurance going after a plant closing or relocation. That rule (Conn. Gen. Stat. 31-51n and 31-51o) was repealed by section 8 of Public Act 24-147, effective from passage and approved June 6, 2024. It required continued health insurance, never a severance payment, and it is no longer Connecticut law.

How Connecticut enforces promised severance

Connecticut treats promised severance as a contract right. In Mace v. Conde Nast Publications, Inc., 155 Conn. 680 (1967), former employees sued for severance pay promised in an employee handbook and won a jury verdict. The case turned on whether the two-year limit in Conn. Gen. Stat. 52-596, which covers actions for "remuneration for employment payable periodically," applied to the claim.

The Connecticut Supreme Court held that it did not apply to lump-sum severance. It described severance as either "a kind of accumulated compensation for past services" or "a form of compensation for the termination of the employment relation," and held:

"Under neither description would severance pay amount to 'the payment of remuneration for employment payable periodically.'" (Mace v. Conde Nast Publications, Inc., 155 Conn. 680)

So the two-year wage limit did not apply to that claim. Connecticut's general contract statutes set six years for an action on a written, simple or implied contract (Conn. Gen. Stat. 52-576) and three years for an express oral agreement not put in writing (52-581). Which one fits depends on how your severance was promised, so confirm the deadline with a lawyer before you rely on it.

Is severance "wages" under Connecticut law?

That question is unresolved in the sources we reviewed. Conn. Gen. Stat. 31-71a(3) defines wages as "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation." We found no Connecticut appellate decision holding that promised severance is, or is not, wages under that definition.

The answer matters because 31-72 lets an employee recover twice the full amount of unpaid wages, plus costs and attorney's fees, unless the employer shows a good-faith belief that it paid what the law required. Until a court settles the point, the dependable basis for a severance claim in Connecticut is the employer's promise itself, so keep a copy of the handbook, plan, offer letter or agreement that contains it.

If your severance comes from a formal company plan, federal law may govern it instead. ERISA supersedes state laws that relate to covered employee benefit plans (29 U.S.C. 1144(a)), and the U.S. Department of Labor says its Employee Benefits Security Administration may assist an employee who did not receive severance under an employer-sponsored plan.

When must severance be paid in Connecticut?

No Connecticut statute we found sets a deadline for severance itself. The final-wage statute, Conn. Gen. Stat. 31-71c, says: "Whenever an employer discharges an employee, the employer shall pay the employee's wages in full not later than the business day next succeeding the date of such discharge." Wages of a laid-off or resigning employee are due by the next regular payday.

Whether those deadlines reach severance depends on whether severance is "wages," which is unresolved. A separate statute, 31-76k, requires payment of accrued fringe benefits such as vacation at termination only when the employer's policy or a collective bargaining agreement provides for it, and it does not mention severance. In practice, the payment date for severance is whatever the agreement or policy says. For your last regular paycheck, see Connecticut final paycheck laws.

Where to file a claim for unpaid severance

The Connecticut Department of Labor's Wage and Workplace Standards Division investigates complaints of failure to pay wages. Its complaint page says investigations are limited by 52-596 to the previous two years, and that the Division has no jurisdiction over wrongful termination, discrimination or unemployment matters. The page does not mention severance, so it does not say whether the Division will take a severance-only complaint.

Section 52-596 also provides that its two-year limit "shall be tolled upon the filing with the Labor Commissioner of a complaint of failure to pay wages." The established route for promised severance is a contract lawsuit in Superior Court, which is how the Mace employees recovered. If the Division declines a severance complaint, that is the route that remains.

Severance and Connecticut unemployment benefits

Severance can stop your Connecticut unemployment benefits for the weeks it covers. For weeks on or after January 1, 2024, Conn. Gen. Stat. 31-236(a)(4)(B) makes a claimant ineligible during any week with respect to which the claimant "has received or is about to receive remuneration in the form of ... wages in lieu of notice or dismissal payments, including severance or separation payment by an employer to an employee beyond the employee's wages upon termination of the employment relationship or any payment by way of compensation for loss of wages."

The same subparagraph excludes "any payment of accrued vacation pay payable upon separation from employment." The rule does not distinguish a lump sum from salary continuation; both fall within "received or is about to receive."

The waiver exception is gone

The version of the rule that applied before January 1, 2024, still printed in 31-236(a)(4)(A), did not count a separation payment if the employee "was required to waive or forfeit a right or claim independently established by statute or common law, against the employer as a condition of receiving the payment." The current version in (B) does not contain that exception. Signing a release in exchange for severance no longer keeps the payment outside the rule.

Report it to the Department of Labor

The Department of Labor's benefits booklet says: "A severance package, pay in lieu of notice, or a continuation of pay with full benefits from an employer may affect UI benefits. Be sure to report any separation payments when you file your claim." It adds that the Department may contact you for details to decide whether the payment is deductible.

Neither the statute nor the booklet explains how much of a benefit is deducted or how a lump sum is spread across weeks. Ask the Department when you file. For benefit amounts and filing, see Connecticut unemployment benefits.

What a Connecticut severance agreement can and cannot require

Apart from two exceptions, we found no Connecticut statute that limits release, confidentiality or non-disparagement terms in a private severance agreement, and no state review or revocation period. First, Conn. Gen. Stat. 31-290 says no contract can relieve an employer of its workers' compensation obligations, and an agreement about compensation for a work injury binds only after a workers' compensation administrative law judge approves it (31-296). If you have a work injury, do not assume a general release in a severance agreement settles that claim. Second, a release cannot take away your right to unemployment benefits: under Conn. Gen. Stat. 31-272(a), "No agreement by an employee to waive, release or commute his rights to benefits or any other rights under this chapter shall be valid," and no employer shall "require or accept any waiver by an employee of any right hereunder." We searched chapter 557 and the state's human rights chapter (46a-51 to 46a-104), and read Public Act 19-16, the 2019 sexual harassment act, which contains no section limiting nondisclosure agreements. This rests on a keyword search of those chapters rather than every title, so treat it as a finding from what we reviewed rather than a confirmed absence.

Bills to limit nondisclosure agreements have not passed. SB 1035 (2025) was tabled on the Senate calendar on May 13, 2025, and SB 355 (2026) was tabled on April 13, 2026; neither saw further action.

Releases of wage claims

Two wage-law provisions may matter if your agreement covers pay you are already owed. Conn. Gen. Stat. 31-71d(b) says "any release required by an employer as a condition to payment shall be void" where the employer pays the wages it concedes are due. Section 31-72 says "Any agreement between an employee and his or her employer for payment of wages other than as specified in said sections shall be no defense" to a wage action.

Both protect wages. Because it is unresolved whether severance is wages, and we found no Connecticut statute or case on a negotiated release of wage claims in a severance agreement, these provisions do not settle whether a severance release is enforceable.

Training-cost repayment notes

Since 1985, Conn. Gen. Stat. 31-51r has voided employment promissory notes that an employer with 26 or more employees requires, as a condition of employment, an employee or job applicant to sign, promising to pay the employer if the employee leaves before a stated period, including notes to repay training costs. Public Act 26-12 removes the 26-employee limit for notes executed on or after October 1, 2026. The statute does not mention severance.

Non-compete terms in a severance agreement

Outside a few occupation-specific statutes, such as those for security guards and broadcast employees (Conn. Gen. Stat. 31-50a, 31-50b), Connecticut courts judge a non-compete under a common-law test: it must be limited in time or place, give the employer no more than fair protection, and not stop you from working in your occupation and supporting yourself (Scott v. General Iron & Welding Co., 171 Conn. 132 (1976)). A non-compete in a severance agreement is measured by that same test.

Federal limits that also apply

These federal rules apply in Connecticut; our severance pay laws guide explains each:

• Workers 40 and older. A release of federal age-discrimination claims must give you at least 21 days to consider it (45 days in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)).
• Sexual harassment and assault. Under the Speak Out Act, a nondisclosure or non-disparagement clause agreed to before such a dispute arises cannot be enforced in court when the conduct is alleged to violate federal, tribal or state law (42 U.S.C. 19403).
• Labor-law rights. The NLRB's McLaren Macomb decision, 372 NLRB No. 58 (2023), bars severance agreements that require employees to broadly give up their National Labor Relations Act rights. The NLRB's General Counsel is arguing to overrule it in Valley Radiology, P.A. (10-CA-324512), an open case, so the decision remains Board law until the Board acts.

Connecticut tax withholding on severance

Connecticut withholds income tax on severance like other pay. The Department of Revenue Services' Employer's Tax Guide (IP 2026(1)) says amounts that are wages for federal withholding are wages for Connecticut withholding and lists severance pay among them. When severance is paid separately from regular wages, the employer computes tax on the combined regular and supplemental wages and withholds the difference; the guide sets no separate flat rate for severance.

Reading a Connecticut severance offer

Check where the promise comes from: a handbook, plan, offer letter or agreement. Mace was won on a handbook promise, so keep a copy. Note whether the money is a lump sum or salary continuation and report it when you file for unemployment, because since 2024 a release does not take it outside 31-236(a)(4)(B). Our severance pay laws guide has general guidance on reading and negotiating an offer.

Recent Connecticut changes and failed bills

We did not check bills filed for the 2027 session. Check the General Assembly's bill pages before relying on the absence of a new severance or layoff bill.

Related

• Severance pay laws by state
• Connecticut unemployment benefits
• Connecticut final paycheck laws
• Connecticut at-will employment laws

Disclaimer: This article provides general legal information about Connecticut severance pay law (the wage payment statutes, Conn. Gen. Stat. 31-71a to 31-76k, and the unemployment rule in 31-236(a)(4)(B)) and the federal laws that apply in Connecticut. It is not legal advice. The information was verified on October 7, 2026. For advice about your situation, contact the Connecticut Department of Labor, a legal aid office or a lawyer licensed in Connecticut.

Last updated: October 7, 2026.

Frequently Asked Questions

Is severance pay required by law in Connecticut?

No. We found no severance mandate in Connecticut's employment, wage or unemployment chapters (chapters 557, 558 and 567). Severance is owed only if an employer promised it in a contract, handbook, plan or agreement, and courts enforce that promise as a contract (Mace v. Conde Nast, 155 Conn. 680).

Does Connecticut have its own WARN Act?

We found none. The Connecticut Department of Labor's WARN page describes the federal WARN Act, which requires 60 days of notice generally from employers with 100 or more full-time employees (29 U.S.C. 2101-2102), with notice going to the Department's Dislocated Worker Unit.

Does severance affect unemployment in Connecticut?

Yes. Since January 1, 2024, you are ineligible for benefits in any week for which you received or are about to receive severance or separation pay (Conn. Gen. Stat. 31-236(a)(4)(B)). Accrued vacation pay paid at separation is excluded.

Do I have to report severance to the Connecticut Department of Labor?

Yes. The Department's benefits booklet tells claimants to report any separation payments when they file, and says the Department may contact them to decide whether the payment is deductible.

If I sign a release, does my severance still count against unemployment in Connecticut?

Yes, under the current rule. The pre-2024 version excluded payments made in exchange for waiving a legal claim, but 31-236(a)(4)(B), which applies on or after January 1, 2024, has no such exception.

Is severance considered wages in Connecticut?

It is unresolved. Conn. Gen. Stat. 31-71a defines wages as compensation for labor or services, and we found no Connecticut appellate decision deciding whether promised severance fits that definition.

How long do I have to sue for unpaid severance in Connecticut?

The Connecticut Supreme Court held in Mace v. Conde Nast that the two-year limit for periodic pay in 52-596 does not apply to lump-sum severance. Connecticut sets six years for an action on a written, simple or implied contract (52-576) and three years for an oral agreement not put in writing (52-581), so confirm which applies with a lawyer.

How long do I have to sign a severance agreement in Connecticut?

We found no Connecticut statute setting a review or revocation period. If you are 40 or older, federal law gives you at least 21 days to consider a release of age claims, 45 in a group layoff, and 7 days to revoke it (29 U.S.C. 626(f)).