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

No Louisiana statute we found requires an employer to pay severance, and we found no Louisiana WARN act. Severance in Louisiana is owed only when the terms of employment, a contract or a company policy promise it. The one Louisiana statute we found that names severance is R.S. 23:1601(7)(d), which treats severance pay as wages that reduce unemployment benefits.

For how other states handle severance, and the federal rules that apply everywhere, see our severance pay laws by state guide.

Information last verified on October 8, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Louisiana law on severance pay: the absence of a state mandate or layoff-notice law, the final-pay and penalty-wage rules in R.S. 23:631 and 23:632, the unemployment offset in R.S. 23:1601(7), and the nondisclosure limit in R.S. 9:2717.3. Federal rules appear in short notes; the full federal layer is on our severance pay laws guide. For final pay deadlines in detail, see Louisiana final paycheck laws; for benefit amounts, see Louisiana unemployment benefits.

Is severance pay required in Louisiana?

No Louisiana law we found requires it. We read R.S. 23:631, 23:632 and 23:634, the wage-payment sections that apply at separation, and the unemployment provision in R.S. 23:1601(7)(d); none requires severance. The U.S. Department of Labor says the federal Fair Labor Standards Act does not require severance either; it is a matter of agreement between employer and employee.

A search of the Legislature's site for 2024-2026 bills on severance or mass layoffs found none on point. We did not run a full-text search of the Louisiana Revised Statutes, so treat this as what our review found rather than a guarantee.

No Louisiana WARN act: federal WARN applies

We found no Louisiana statute requiring notice before a plant closing or mass layoff. The only state-law trace is a failed bill: SB 209 of the 2018 regular session would have created a "Louisiana WARN Act" (proposed R.S. 23:1019.1-1019.9). It was reported favorably by the Senate Labor and Industrial Relations Committee and engrossed, then on April 9, 2018 was returned to the calendar, subject to call. It never received a final Senate vote.

The Louisiana Workforce Commission's WARN pages describe only the federal act. They ask employers to send notices by email (preferred) or mail to the Rapid Response Unit of the Louisiana Works Office of Workforce Development 60 days before the layoff date.

Federal WARN applies to employers with 100 or more employees not counting part-time employees, or 100 or more employees who together work at least 4,000 hours a week excluding overtime (29 U.S.C. 2101(a)(1)), and an employer that skips the notice owes back pay and benefits for up to 60 days (29 U.S.C. 2101-2102, 2104). Our severance pay laws guide explains who it covers.

Promised severance and Louisiana's final-pay law

R.S. 23:631(A)(1)(a) requires an employer, on discharge, to "pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first." An employee who resigns must be paid by the next regular payday for the pay cycle worked, or within 15 days of resigning, whichever occurs first (631(A)(1)(b)).

The statute names vacation pay (631(D)) and commissions, incentive pay and bonuses (631(E)) specifically. It does not name severance. Whether a severance promise in a contract or policy is an "amount then due under the terms of employment" is not answered by the statute, and we found no Louisiana appellate decision holding either way. A legal aid office or a lawyer licensed in Louisiana can advise on a particular promise.

If the amount owed is disputed, the employer must still pay the undisputed portion (631(B)). The deadline does not apply where a collective bargaining agreement provides otherwise (631(A)(3)). Final-pay timing is covered in Louisiana final paycheck laws.

Penalty wages and how to claim

R.S. 23:632 sets the penalty when an employer fails to comply with 23:631:

• Penalty wages. The employer is liable for "ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due," whichever is less (632(A)).
• Good-faith dispute. If the employer has a good-faith defense, it owes only the wages in dispute plus judicial interest from the date suit is filed (632(B)).
• Attorney fees. A court awards reasonable attorney fees for a well-founded suit filed after three days have passed from the first demand following discharge or resignation (632(C)).

These remedies reach severance only if the severance is part of the amount due under 23:631, which the statute leaves open. The employee may sue under 631(B), following Code of Civil Procedure article 2592. The Louisiana Workforce Commission's timely-payment poster tells employees to raise a late-payment complaint with the employer first and, if nothing happens, report it to the Office of Workforce Development; the poster does not mention severance.

Louisiana Civil Code article 3494 sets a three-year prescriptive period for actions for "compensation for services rendered, including payment of salaries, wages." Civil Code article 3499 sets a ten-year prescription for a personal action, such as a suit on a contract, "unless otherwise provided by legislation." We found no source saying which of the two periods governs a severance claim, so filing within three years is the cautious course.

No forfeiture contracts

R.S. 23:634(A) bars an employer from requiring employees to sign contracts under which they forfeit their wages if discharged or if they resign before the contract is completed; employees remain entitled to "the wages actually earned up to the time of their discharge or resignation." This protects earned wages. It does not address a negotiated release in a severance agreement.

Severance and Louisiana unemployment benefits

Severance reduces Louisiana unemployment. Under R.S. 23:1601(7)(d)(i), when an employer or a dismissal plan pays, or holds ready to pay, vacation pay, dismissal pay or severance pay, the payment "shall be deemed 'wages'" and is "prorated for the period of time which it would have taken such individual to earn such remuneration," excluding overtime. If the weekly amount is less than the benefit otherwise payable, the benefit is reduced by that amount (1601(7)(e)).

The same subsection also covers wages in lieu of notice (1601(7)(a)) and federal WARN Act payments (1601(7)(f)). The statute speaks of "a payment or payments," and does not distinguish a lump sum from salary continuation. The section was amended effective December 31, 2024 (Acts 2024, No. 553) and December 31, 2025 (Acts 2025, No. 151); we did not compare what those acts changed in this subsection, and the Workforce Commission's claimant guide was unavailable when we checked. Benefit amounts are covered in Louisiana unemployment benefits.

What a Louisiana severance agreement can ask you to give up

The main Louisiana limit we found on severance-agreement terms concerns confidentiality. R.S. 9:2717.3, enacted by Act 781 of 2024 (HB 161, which became law without the Governor's signature, effective August 1, 2024), makes a nondisclosure clause that an employer requires, and that was agreed to before a hostile work environment or sexual harassment dispute, unenforceable in court. The section expressly allows a confidential settlement agreement about hostile work environment or sexual harassment that is entered into after a report is filed or a dispute has occurred. A severance agreement signed after such a dispute falls in that allowance. We read the enrolled act, not the codified section page.

One other Louisiana limit applies: under R.S. 23:1691, an agreement to waive or release your rights to Louisiana unemployment benefits is not valid, and an employer may not require or accept such a waiver or obstruct a claim, so a severance clause saying you will not file for unemployment does not bar a claim. We found no Louisiana statute that sets a review or revocation period for a severance agreement, or that limits releases or non-disparagement terms beyond these two sections. That is based on targeted searches, not a full-text search of the statutes.

Federal law adds two limits. If you are 40 or older, a release of age-discrimination claims must give you at least 21 days to consider it (45 in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)). And the federal Speak Out Act makes a pre-dispute nondisclosure or non-disparagement clause unenforceable in sexual assault and sexual harassment disputes (42 U.S.C. 19403). Our severance pay laws guide covers the federal rules.

Non-compete terms in a severance agreement

Louisiana voids non-competes except as R.S. 23:921 allows (23:921(A)(1)). An employee may agree not to compete with the employer or solicit its customers only within specified parishes or municipalities where the employer carries on a like business, for no more than two years after employment ends (23:921(C)), and a clause in a severance agreement is tested the same way.

Recent changes

• Act 781 of 2024 (HB 161): pre-dispute nondisclosure clauses on hostile work environment and sexual harassment unenforceable, effective August 1, 2024 (R.S. 9:2717.3).
• Act 556 of 2024 (HB 352): added R.S. 23:631(E) on when commissions, incentive pay and bonuses are an amount then due at separation. It does not address severance.
• Act 113 of 2025 (SB 133): amended R.S. 23:631, 23:633 and 23:635 on payment of wages, effective August 1, 2025; it became law without the Governor's signature. The text we read does not mention severance.

We found no pending 2026 bill on severance, mass layoffs or separation agreements, but we did not sweep the full 2026 bill index.

Related

• Severance pay laws by state
• Louisiana final paycheck laws
• Louisiana unemployment benefits

Disclaimer: This article provides general legal information about Louisiana severance pay law (R.S. 23:631, 23:632, 23:634 and 23:1601, and R.S. 9:2717.3) and the federal laws that apply in Louisiana. It is not legal advice. The information was verified on October 8, 2026. For advice about your situation, contact the Louisiana Workforce Commission, a legal aid office, or a lawyer licensed in Louisiana.

Last updated: October 8, 2026.

Frequently Asked Questions

Is severance pay required by law in Louisiana?

No Louisiana statute we found requires it. Federal law does not require it either, so severance is owed only when the terms of employment, a contract or a company policy promise it.

Does severance affect unemployment in Louisiana?

Yes. R.S. 23:1601(7)(d) deems severance and dismissal pay to be wages, prorated over the time it would have taken to earn them, and (7)(e) reduces weekly benefits by that amount.

Does Louisiana have a state WARN Act?

We found none. SB 209 of 2018 would have created a Louisiana WARN Act but stalled on the Senate calendar and was never enacted. The Louisiana Workforce Commission describes only the federal WARN Act, which requires 60 days' notice from employers with 100 or more full-time workers, or 100 or more workers who together work at least 4,000 hours a week.

When must an employer pay what is owed after I am fired in Louisiana?

R.S. 23:631(A)(1)(a) requires the amount then due under the terms of employment by the next regular payday or within 15 days of discharge, whichever occurs first. Whether promised severance is part of that amount is not settled by the statute.

What penalty applies if a Louisiana employer pays late?

Under R.S. 23:632, an employer that violates R.S. 23:631 is liable for 90 days' wages at the daily rate or full wages from the demand until payment, whichever is less, plus reasonable attorney fees for a well-founded suit. In a good-faith dispute, liability is limited to the wages in dispute plus judicial interest.

Can a Louisiana severance agreement require confidentiality?

R.S. 9:2717.3 makes a pre-dispute nondisclosure clause about hostile work environment or sexual harassment unenforceable, but it allows a confidential settlement agreement signed after a report is filed or a dispute has occurred.