payseverance.com

In return for severance pay, you should require that the employee sign a release that frees you from all potential law suits in the future. Without severance pay, there is no reason for an employee to sign and release you from all claims. Obtaining the release is important in a world in which anyone can sue you at any time for any reason – or no reason at all.

Remember to obtain a separate release from employees who are over age 40 that includes a release from age discrimination suits. Adhere to the timeline required in your state and country, too. In Michigan, as an example, the employee has 21 days to decide whether to sign the release and accept the severance pay. Once signed, the employee then has an additional seven days during which he or she can renege.