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

Missouri law does not require employers to pay severance. The Missouri Division of Labor Standards says so directly: "Employers are not required to provide vacation pay, holiday pay, or severance pay." Severance is at the employer's discretion unless a contract sets it, and bills in 2025 and 2026 that would have required severance after large layoffs did not pass.

Where Missouri law matters most is unemployment. The Missouri Division of Employment Security says severance "is not reportable" and does not reduce your weekly benefit, while pay under the federal WARN Act does. For how other states handle severance and the full federal rules, 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 Missouri law on severance pay: the absence of a state severance or layoff-notice law, how severance and WARN pay affect unemployment benefits (RSMo 288.036 and 288.060), the final-pay statute (RSMo 290.110) and the workers' compensation waiver rule (RSMo 287.390). Federal rules appear only in short notes; the full federal layer is on our severance pay laws guide. For final-pay deadlines, see Missouri final paycheck laws; for benefit amounts, see Missouri unemployment benefits.

Is severance pay required in Missouri?

No. The Division of Labor Standards' page on wages, hours and dismissal rights says: "Employers are not required to provide vacation pay, holiday pay, or severance pay." It adds that these are benefits given at the employer's discretion, and that "the exception would be instances where an employer has entered into a contract where certain benefits are established by agreement."

Our own search agrees. We read the full text of every section in the three Missouri chapters on employment (285), unemployment (288) and wages (290) on the Revisor of Statutes site, searching for severance, dismissal pay, separation pay, termination pay, pay in lieu of notice, plant closing and mass layoff. The sections that mention severance treat it only as wages for unemployment or as earnings protected from garnishment; none requires it. Federal law does not require severance either.

No Missouri WARN act

Missouri has no law of its own requiring notice before a plant closing or mass layoff. Two bills would have created one, with mandatory severance attached, and neither passed:

• HB 403 (2025) would have provided "mandatory severance for employees terminated in certain layoffs." Its last action was a referral to the House Emerging Issues committee on May 15, 2025.
• HB 2285 (2026) would have added RSMo 290.116, covering a termination or transfer of operations, or a mass layoff, of 50 or more employees in 30 days. It would have required 90 days' notice from employers with 100 or more employees and severance of one week's pay per full year of employment, plus four extra weeks when notice fell short. Its last action was a referral to the same committee on May 15, 2026.

Federal WARN still applies in Missouri. It requires 60 days' written notice from 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 not counting overtime, before a covered plant closing or mass layoff, and an employer that skips it owes back pay and benefits for up to 60 days (29 U.S.C. 2101-2102, 2104). Our severance pay laws guide explains who is covered.

Severance and Missouri unemployment benefits

What the Division of Employment Security says

The Missouri Division of Employment Security (DES) answers the question in its FAQs: "Severance pay is not reportable, so you may file an unemployment claim while receiving severance pay." A second FAQ draws the line between kinds of separation pay:

"Vacation, holiday and W.A.R.N. pay reduce your weekly benefit amount (WBA) in the same way as wages. Severance, termination pay or Social Security payments do not reduce your WBA."

That is the agency's stated position. When you file, answer the agency's questions about any payment from your employer truthfully, and keep your severance agreement in case it asks what the payment was for.

WARN pay is treated as wages

A Missouri appeals court drew the same line in Labor & Industrial Relations Commission v. Division of Employment Security, 856 S.W.2d 376 (Mo. App. E.D. 1993). The question was whether payments required under the federal WARN Act, made in place of the 60-day notice, are more like wages or like severance pay. The court held that "payments to employees required by the Act are fully deductible from Missouri unemployment benefits." The court explained that wage-type payments after separation are deductible, while severance or termination-type payments are not.

So the label on your check matters less than what it is for. A payment that stands in for the WARN notice period reduces benefits; true severance, under the DES position, does not.

What the statute says, and the version that never became law

RSMo 288.036.1 defines wages for unemployment purposes. The operative text says: "Severance pay shall be considered as wages to the extent required pursuant to the Federal Unemployment Tax Act, 26 U.S.C. Section 3306(b). Vacation pay and holiday pay shall be considered as wages for the week with respect to which it is payable."

If you look up 288.036 on the Revisor's site, the version shown first is a 2015 amendment from House Bill 150, and the Revisor notes that it was declared unconstitutional in Pestka v. State. In Pestka v. State, 493 S.W.3d 405 (Mo. banc 2016), the Missouri Supreme Court held that the Senate lacked authority to override the governor's veto of HB 150 in the September 2015 veto session: "Because HB 150 was not passed over the governor's veto, none of its provisions became law."

Any severance rule that appears only in that 2015 version is not Missouri law. The 2006 version, quoted above, is the one in force.

Severance in your base period

Severance can also matter for your wage credits. Under RSMo 288.060, if termination pay or severance pay falls in your base period, you may choose to have it counted in the calendar quarter in which it was paid or spread equally across the quarters of your base period. That option appears in the 2006 and 2011 versions of the section, not only in the void 2015 version. Benefit amounts and filing are on Missouri unemployment benefits.

Unpaid promised severance in Missouri

The final-pay statute does not mention severance

RSMo 290.110 makes "the unpaid wages of the servant or employee then earned at the contract rate" due on the day of discharge. If you request payment in writing and do not receive it within seven days, your wages continue from the date of discharge at the same rate until paid, for no more than 60 days. The Missouri Department of Labor tells employees to send that request by certified mail, return receipt requested.

Nothing in 290.110 mentions severance, and we found no Missouri appellate decision on whether promised severance is wages under it, so this page does not say the 60-day penalty applies to severance. When severance is due is set by your agreement or plan. The final-pay rules themselves are on Missouri final paycheck laws.

Collecting it is a private action

Missouri has no state agency that collects unpaid pay for you. The Department of Labor says that "because the state of Missouri does not have authority to collect wages for any individual, any moneys due would have to be collected by private legal action." It points claims under $5,000 to small claims court and larger ones to circuit court.

If the promise is part of an ongoing company severance plan, it can be an employee benefit plan under ERISA, the federal benefits law, which supersedes state laws that relate to covered plans (29 U.S.C. 1002(1), 1144(a)). Missouri generally allows five years to sue on a contract, including an oral one (RSMo 516.120(1)), and ten years on a written agreement that itself promises to pay money (RSMo 516.110(1)). Which period fits depends on the wording of your agreement, so ask a lawyer licensed in Missouri or a legal aid office well before either runs out.

What a Missouri severance agreement can ask you to give up

Workers' compensation claims

RSMo 287.390.1 provides that "no agreement by an employee or his or her dependents to waive his or her rights under this chapter shall be valid," and no settlement of a workers' compensation claim is valid until an administrative law judge or the Labor and Industrial Relations Commission approves it. A general release in a private severance agreement therefore does not by itself settle a comp claim. See Missouri workers' compensation laws.

Unemployment rights

A severance release cannot give up your right to unemployment benefits. Under RSMo 288.380.1, any agreement by a worker to waive, release or commute rights to benefits is void, and an employer may not accept such a waiver.

Other terms

Apart from that unemployment rule, we found no Missouri statute in chapters 285, 288 or 290 limiting nondisclosure, non-disparagement or review-period terms in a separation agreement. That search did not cover the Missouri Human Rights Act (chapter 213), so this page does not say no such rule exists. We also found no Missouri statute or case on releasing unpaid-wage claims.

Non-compete terms in a severance agreement

Missouri courts enforce a non-compete, including one in a severance agreement, only if it is reasonable in time and area and only to the extent it protects the employer's trade secrets or customer contacts (Whelan Security Co. v. Kennebrew, 379 S.W.3d 835 (Mo. banc 2012)).

Federal limits

If you are 40 or older, a release of federal 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)). Our severance pay laws guide covers the other federal rules on releases.

Before signing, check how the agreement describes each payment. Under the DES position and the 1993 appeals decision, pay that replaces the WARN notice period reduces unemployment benefits while true severance does not.

Recent changes

No Missouri law on severance or layoff notice was enacted in 2024-2026; HB 403 and HB 2285, described above, both stalled in committee. Neither 288.036 nor 288.060 shows a version newer than 2015 on the Revisor's site. The 2027 session has not convened, and we did not check bills prefiled for it.

Related

• Severance pay laws by state
• Missouri unemployment benefits
• Missouri final paycheck laws
• Missouri workers' compensation laws

Disclaimer: This article provides general legal information about Missouri severance pay law (RSMo 288.036, 288.060, 290.110 and 287.390) and the federal laws that apply in Missouri. It is not legal advice. The information was verified on October 8, 2026. For advice about your situation, contact the Missouri Division of Employment Security about unemployment, a legal aid office, or a lawyer licensed in Missouri.

Last updated: October 8, 2026.

Frequently Asked Questions

Is severance pay required by law in Missouri?

No. The Missouri Division of Labor Standards says employers are not required to provide severance pay unless a contract establishes it.

Can I collect unemployment while receiving severance in Missouri?

According to the Missouri Division of Employment Security, yes: severance pay is not reportable and does not reduce your weekly benefit amount. Vacation, holiday and WARN pay do reduce it.

Does WARN pay reduce Missouri unemployment benefits?

Yes. The Division of Employment Security says WARN pay reduces your weekly benefit like wages, and a Missouri appeals court held in 1993 that WARN payments are fully deductible (856 S.W.2d 376).

Does Missouri have a state WARN Act?

No. HB 403 (2025) and HB 2285 (2026) proposed one with mandatory severance, and neither passed. Federal WARN generally covers employers with 100 or more full-time employees.

How do I collect unpaid severance in Missouri?

Through a private legal action. The Missouri Department of Labor says the state has no authority to collect wages for individuals and points claims under $5,000 to small claims court and larger ones to circuit court.

Can a Missouri severance agreement waive my workers' comp claim?

No. RSMo 287.390.1 says no agreement to waive workers' compensation rights is valid, and a comp settlement needs approval by an administrative law judge or the Commission.