A definition for Severance Package.

Severance package means the money and/or other benefits that an employer may offer to a terminated employee to temporarily offset the employee's job loss. Severance pay is a means of supplementing state-provided unemployment benefits and is paid in addition to wages and any other amount that employers owe employees when their employment ends. Severance pay is often given during mass layoffs. A severance package is a combination of severance pay and other benefits like extended health insurance benefits payable under Consolidated Omnibus Budget reconciliation Act (COBRA). Severance pay is calculated on the basis of length of service and weekly salary or wages of the employee. In order to be eligible for severance pay, departing employees should sign separation or severance agreements which may deprive such employees of their right to take legal action against their former employers. The departing employees are also required to sign noncompete or nondisclosure agreements before seeking severance pay.