New York Severance Pay Laws (2026): Is Severance Required?

No. New York has no law that requires an employer to pay severance. The one statutory payment a laid-off New York worker can be owed is back pay under the state WARN Act (Labor Law Article 25-A): an employer with 50 or more employees that orders a covered layoff or closing without 90 days' written notice owes each affected employee back pay and benefits for up to 60 days (Labor Law 860-b, 860-g).

When an employer has agreed to pay severance, New York law treats it as a "wage supplement." Labor Law 198-c lists "separation" pay among benefits and wage supplements, which brings promised severance within the state's wage-collection law and its six-year filing period. Severance can also delay New York unemployment benefits under Labor Law 591(6). For the rules in every state, see our state-by-state guide to severance pay laws.

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

Jurisdiction scope: This article covers New York law on severance pay: the New York WARN Act (Labor Law Article 25-A), separation pay as a wage supplement (Labor Law 190 and 198-c), dismissal pay and unemployment benefits (Labor Law 591(6)), and confidentiality limits in General Obligations Law 5-336, with short notes on the federal rules that apply in New York; the full federal rules are on our severance pay laws guide. It does not cover when your final paycheck is due; see New York final paycheck laws. It does not cover benefit amounts; see New York unemployment benefits.

Is severance pay required in New York?

No New York statute requires an employer to pay severance. We reviewed the New York WARN Act (Labor Law sections 860-a, 860-b, 860-e, 860-g and 860-h) and Labor Law sections 190, 198, 198-c and 591 on the New York Senate's official site. The only pay Article 25-A requires is back pay and benefits for a notice violation, not severance.

The 2025-26 legislative session confirms the point from the other direction: a pending bill, S2595/A7781A, would require severance in WARN layoffs, which means no such requirement exists today (see the pending legislation section below). We did not run a keyword search across every New York code, so this is a documented finding for the Labor Law articles named here rather than an exhaustive one. Federal law does not fill the gap: the U.S. Department of Labor says the Fair Labor Standards Act contains no severance requirement.

So a New York worker can be owed money at separation from four sources: a contract or offer letter, a company severance plan or policy, a separation agreement offered at the exit, or WARN back pay when a covered employer skipped the notice.

The New York WARN Act: 90 days' notice and back pay

The New York Worker Adjustment and Retraining Notification Act reaches smaller employers and smaller layoffs than the federal WARN Act. An employer covered by both must comply with both.

New York also treats a relocation, moving all or substantially all operations 50 miles or more away, as a notice event (860-a(8)). Article 25-A does not apply to federal or state government or to political subdivisions (860-a(3)).

Who must receive the notice

Section 860-b(1) says an employer "may not order a mass layoff, relocation, or employment loss, unless, at least ninety days before the order takes effect, the employer gives written notice of the order." The notice goes to:

• affected employees and their representatives;
• the New York State Department of Labor;
• the local workforce investment boards;
• the chief elected official of the local government and of the school district; and
• each locality that provides police, fire, emergency medical or other emergency services.

The notice must include the elements federal WARN requires (860-b(2)). It is not required when the layoff or closing is necessitated by a physical calamity or an act of terrorism or war (860-b(3)). Section 860-c also excuses the notice for a plant closing by a company actively seeking capital or business, and where the need for notice was not reasonably foreseeable, for temporary facilities or completed projects, for natural disasters, and for strikes or lockouts; the employer must still give as much notice as is practicable. This summary covers sections 860-a, 860-b, 860-c, 860-g and 860-h; other sections of Article 25-A, and the Department of Labor's WARN regulations (12 NYCRR Part 921), were not reviewed for this page. The Department of Labor's WARN page says those regulations were strengthened to address remote work.

What an employer owes for skipping the notice

An employer that fails to give an employee the required notice is liable to that employee for back pay at the greater of the employee's average regular rate over the last three years or final regular rate, plus the value of benefits, including medical expenses a benefit plan would have covered (Labor Law 860-g(1)). The period of liability runs up to 60 days or half the number of days the employee was employed, whichever is smaller (860-g(2)).

That liability is reduced by wages paid for the violation period, by voluntary and unconditional payments, by payments to third parties or trustees on the employee's behalf, and by federal WARN liability the employer paid (860-g(4)). The Commissioner of Labor may reduce the amount for an employer that acted in good faith (860-g(6)).

An employee can bring a civil action within the time allowed by CPLR 213, and the court may award attorney's fees (860-g(7)). Separately, an employer that fails to give the required notice to the Department of Labor faces a civil penalty of up to $500 a day, capped at the federal maximum and waived if the employer pays each employee what it owes within three weeks from the date it orders the mass layoff, relocation or employment loss (860-h(1)-(2)).

WARN back pay does not count against New York unemployment benefits: section 860-g(3) says these payments are not remuneration under the unemployment insurance law and may not reduce benefits. A federal WARN claim, by contrast, is brought only in federal court; the U.S. Department of Labor does not enforce it.

Promised severance is a "wage supplement" under New York law

If an employer agreed to pay severance, New York's wage law can reach it. Labor Law 198-c(2) defines the term:

"As used in this section, the term 'benefits or wage supplements' includes, but is not limited to, reimbursement for expenses; health, welfare and retirement benefits; and vacation, separation or holiday pay."

Section 190(1) then folds wage supplements into the definition of "wages," "except for the purposes of sections one hundred ninety-one and one hundred ninety-two." Section 198-c applies where the employer is a party to an agreement to pay or provide the benefit. An employer that fails to pay within 30 days after payment is required commits a misdemeanor under section 198-c(1).

How that plays out:

• Collecting in court. Unpaid wage supplements can be pursued in a civil action under Labor Law Article 6, which provides for liquidated damages and attorney's fees under section 198(1-a). The lawsuit must be filed within six years, and the clock is paused while a Department of Labor complaint or investigation is pending (Labor Law 198(3)).
• Filing with the Department of Labor. The Division of Labor Standards takes wage theft claims, and its claim page lists unpaid wage supplements an employer promised, such as vacation pay, holiday pay and bonuses. The page does not name severance or separation pay in the passages we reviewed, and the Department's unpaid-wages page says it will not accept claims for wages owed more than three years since they were earned. That is shorter than the six years allowed for a lawsuit. The same page says the Department will not accept a wage-supplement claim until 30 days after the payment became due, or a claim from an executive, administrative or professional employee who earned over $1,300 a week; those workers can still sue (see Patel, below).
• High earners. Section 198-c(3) excludes bona fide executive, administrative and professional employees whose earnings are "in excess of one thousand three hundred dollars a week" from that section. In Patel v Maybank Kim Eng Securities USA Inc. (2025 NY Slip Op 05194, decided September 30, 2025), the Appellate Division, First Department held that this exclusion applies only to section 198-c and does not stop a high-earning executive from suing under Labor Law 193 and 198 for unpaid severance owed under a separation agreement. The court noted that the 2021 amendments it applied do not reach claims that arose before August 2021.

Two questions remain open in the sources we reviewed. Patel involved severance promised in a signed separation agreement, but we found no court decision on whether a discretionary severance offer that was never agreed counts as an "agreement" under section 198-c. If the severance comes from an ongoing company plan, federal ERISA may control instead: it covers plans that pay benefits in the event of unemployment and supersedes state laws that relate to them (29 U.S.C. 1002(1), 1144(a)). The U.S. Department of Labor says its Employee Benefits Security Administration may help an employee who did not receive severance under an employer-sponsored plan.

When must severance be paid in New York?

The regular pay-frequency rules in Labor Law 191 do not apply to wage supplements, because section 190(1) excludes 198-c items from sections 191 and 192. The timing of severance therefore follows the agreement or plan, and section 198-c(1) makes it a misdemeanor not to pay within 30 days after the payment is required to be made.

We did not review the separate rule on paying wages after a discharge (Labor Law 191(3)) or whether the Department of Labor treats severance as due on that schedule. For your final regular wages, see New York final paycheck laws.

Severance and New York unemployment benefits

New York calls severance "dismissal pay," and it can block unemployment benefits. Labor Law 591(6) says:

"No benefits shall be payable to a claimant for any week during a dismissal period for which a claimant receives dismissal pay if such weekly dismissal pay exceeds the claimant's maximum weekly benefit rate plus the claimant's partial benefit credit."

Key parts of the rule (Labor Law 591(6)(a)-(d)):

• What counts. Dismissal pay covers payments made because of the separation, whether or not the employer was legally required to make them. Pension and retirement payments, payment for accrued leave, health insurance and supplemental unemployment benefit payments are excluded.
• Lump sums. A lump sum is spread across the weeks after your last day of employment, starting the day after, based on your actual weekly pay or your average weekly wage in your highest-paid quarter.
• The 30-day exception. The rule does not apply when the first dismissal payment is made more than 30 days after your last day of employment.

WARN pay is different: payments for a New York or federal WARN violation may not reduce unemployment benefits (Labor Law 860-g(3)).

The Department of Labor's dismissal pay guidance says that any dismissal or severance pay received within 30 days of your last day of work, whether in a lump sum or in installments, may affect benefits. You remain eligible if the weekly amount is less than or equal to the maximum weekly benefit rate, or if the first payment comes more than 30 days after your last day. If you receive dismissal or severance pay within 30 days, the Department says to call its Telephone Claims Center right away; not reporting it risks an overpayment and penalties.

The Department publishes the maximum weekly benefit rate; for benefit amounts and filing, see New York unemployment benefits.

What a New York severance agreement can and cannot require

New York has no statute that gives every departing employee a review or revocation period for a severance release. The time periods that exist apply to specific claims or to workers 40 and older, and a bill to extend them to all employees has not become law.

A release in a severance agreement cannot take away your right to unemployment benefits. Labor Law 595(1) provides: "No agreement by an employee to waive his rights under this article shall be valid."

Confidentiality in discrimination, harassment and retaliation settlements

General Obligations Law 5-336 limits what a settlement of a discrimination, harassment or retaliation claim can require, and many severance agreements resolve exactly those claims:

• Confidentiality must be your choice. A term that prevents disclosure of the underlying facts is allowed only if confidentiality is the complainant's preference (5-336(1)).
• Time to decide. The term must be in writing, in plain English and in the complainant's primary language, and "the complainant shall have up to twenty-one days to consider such term or condition." You then have 7 days after signing to revoke, and the agreement is not effective until that period ends.
• Rights it cannot take away. The term is void to the extent it bars you from taking part in an agency investigation or proceeding, or from disclosing facts needed to receive unemployment insurance, Medicaid or other public benefits.
• No penalties for talking, no forced denials. Under 5-336(3), a release of a claim involving unlawful discrimination, harassment or retaliation is unenforceable if the agreement makes you pay liquidated damages or forfeit the settlement for breaking a nondisclosure or non-disparagement clause, or requires you to state that you were not discriminated against.
• Future-claim clauses need a carve-out. For agreements made on or after January 1, 2020, a clause that would stop you from disclosing facts about a future discrimination claim is unenforceable unless it tells you that it does not stop you from speaking with law enforcement, the Equal Employment Opportunity Commission, the state Division of Human Rights, the attorney general, a local human rights commission or your own lawyer (5-336(2)).

Federal limits that also apply

These federal rules sit on top of 5-336; our severance pay laws guide explains each in full:

• 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, among other requirements (29 U.S.C. 626(f)).
• Sexual harassment and assault. Under the Speak Out Act, a pre-dispute nondisclosure or non-disparagement clause cannot be enforced in court in a sexual assault or sexual harassment dispute, and the Act leaves in place state laws that are at least as protective (42 U.S.C. 19403).
• Labor-law rights. The National Labor Relations Board's McLaren Macomb decision, 372 NLRB No. 58 (2023), bars severance agreements that require employees to broadly give up their rights under the National Labor Relations Act. In memo GC 26-04 (August 26, 2026) the NLRB's General Counsel said she is arguing to overrule it in Valley Radiology, P.A. (10-CA-324512), a case still open, so the decision remains Board law until the Board acts.

We found no New York statute or court decision on whether an employee can release unpaid-wage claims in a private severance agreement; that question is open in the sources we reviewed.

Health coverage, taxes and reading the offer

New York has no rule of its own on either point covered here. Federal COBRA allows up to 18 months of continued group health coverage after a termination or a cut in hours, but not for plans of employers that normally had fewer than 20 employees (29 U.S.C. 1161(b), 1162(2)(A)). The IRS treats severance as supplemental wages subject to federal withholding (IRS Publication 15).

Before you sign, compare the offer with any separation pay an offer letter, contract or written policy already promised, since that promise is a wage supplement under Labor Law 198-c. Check when the first payment arrives relative to your last day, which matters for unemployment under Labor Law 591(6), and whether any confidentiality term meets 5-336. A lawyer licensed in New York can review the specific language.

Pending New York legislation (not law)

New York's 2025-26 session has several bills that would change severance and layoff rules. None of them is law. Statuses below are as shown on the New York Senate's bill pages.

The governor can still sign or veto S372A/A6480A, A618/S496 and S2236A/A2222A once they are delivered. Check the bill pages for the current status before relying on either one.

Related

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

Disclaimer: This article provides general legal information about New York severance pay law (Labor Law Article 25-A and sections 190, 198, 198-c and 591, and General Obligations Law 5-336) and the federal laws that apply in New York. It is not legal advice. The information was verified on October 7, 2026, with bill statuses checked on October 8, 2026. For advice about your situation, contact the New York State Department of Labor's Division of Labor Standards, a legal aid office or a lawyer licensed in New York.

Last updated: October 7, 2026.

Frequently Asked Questions

Is severance pay required by law in New York?

No. No New York statute requires severance. The only state-law layoff payment is back pay and benefits under the New York WARN Act when a covered employer skips the 90-day notice (Labor Law 860-g).

How much notice does the New York WARN Act require?

At least 90 days' written notice before a covered plant closing, mass layoff or relocation, for employers with 50 or more employees, not counting part-time employees (Labor Law 860-a, 860-b). Federal WARN requires 60 days and generally covers employers with 100 or more full-time employees.

What do I get if my employer violated the New York WARN Act?

Back pay at the greater of your three-year average or final regular rate plus the value of benefits, for up to 60 days or half the days you were employed, whichever is smaller (Labor Law 860-g). The amount is reduced by wages and certain payments the employer made.

Is severance considered wages in New York?

Promised severance is a "wage supplement." Labor Law 198-c lists separation pay among benefits and wage supplements, and Labor Law 190(1) includes wage supplements in "wages" except for the pay-frequency rules in sections 191 and 192.

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

A lawsuit under Labor Law Article 6 must be filed within six years (Labor Law 198(3)). The Department of Labor says it will not accept claims for wages owed more than three years.

Can I get unemployment in New York if I receive severance?

It depends on the weekly amount and timing. Under Labor Law 591(6), dismissal pay blocks benefits for a week when it exceeds your maximum weekly benefit rate plus the partial benefit credit, unless the first payment comes more than 30 days after your last day of work.

Do I have to report severance to New York unemployment?

Yes. The Department of Labor says to call its Telephone Claims Center right away if you receive dismissal or severance pay within 30 days of your last day; not reporting it risks an overpayment and penalties.

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

No New York statute gives every employee a review period. General Obligations Law 5-336 gives up to 21 days plus 7 to revoke for confidentiality terms in discrimination, harassment or retaliation settlements, and federal law gives workers 40 and older at least 21 days (45 in a group layoff) plus 7 to revoke.

Is the No Severance Ultimatums Act law in New York?

No. S372A/A6480A passed the Senate on February 11, 2026 and the Assembly on June 1, 2026, but as of October 8, 2026 its bill page showed no delivery to the governor, signature or veto.

Can a New York severance agreement require me to keep a discrimination claim confidential?

Only if confidentiality is your preference, put in writing, with up to 21 days to consider and 7 days to revoke (General Obligations Law 5-336(1)). The agreement also cannot penalize you for breaking the clause or require you to state you were not discriminated against (5-336(3)).