Severance Agreements in Ohio: What to Know Before You Sign

No law makes your employer pay severance. The U.S. Department of Labor explains that the Fair Labor Standards Act has no severance pay requirement: severance is a matter of agreement between an employer and an employee. Ohio is the same. There is no Ohio statute that requires severance pay and no Ohio statute that regulates what a severance agreement can say, so the protections that do exist mostly come from federal law.

That said, a promise is a promise. If severance was promised in your offer letter, an employment contract, or an established company policy, you can enforce it as a contract. If your employer runs a formal severance plan governed by ERISA, you can pursue unpaid benefits through the plan, and the Department of Labor's Employee Benefits Security Administration can assist if severance owed under an employer-sponsored plan is not paid.

Your final paycheck is a separate right you keep either way. Under Ohio Revised Code 4113.15, effective March 20, 2019, employers by default must pay first-half-of-month wages by the first day of the next month and second-half wages by the fifteenth, though a written contract or trade custom can set a different schedule. If undisputed wages sit unpaid 30 days past the regular payday, the employer owes liquidated damages of 6 percent of the unpaid amount or 200 dollars, whichever is greater.

The heart of a severance agreement is the release. In exchange for the money, you typically waive discrimination, retaliation, and wrongful termination claims under federal law and Ohio Revised Code Chapter 4112. Two limits apply to every release: the employer must give you something you are not already entitled to, and the release can only cover claims that already exist. It cannot waive claims that arise after the date you sign.

Ohio workers' compensation claims cannot be released through an ordinary severance agreement. Ohio Revised Code 4123.65, effective September 15, 2020, requires a separate settlement process. For state fund employers, that means an application to the administrator of workers' compensation, and the settlement takes effect only 30 days after approval. For self-insuring employers, the 30-day waiting period runs from the date you and the employer sign, and either side can withdraw consent in writing during that window.

Beyond workers' compensation, federal and Ohio law put several rights entirely off limits, and a clause that tries to reach them is invalid or void even if you sign it. Based on Equal Employment Opportunity Commission guidance and Ohio Revised Code 4141.32, a severance agreement cannot lawfully take away your right to:

The Older Workers Benefit Protection Act (OWBPA) adds timing rights when you are 40 or older and are asked to waive federal age discrimination claims. You must get at least 21 days to consider the agreement, or at least 45 days when the waiver is part of a group termination or exit incentive program. After signing, you have at least 7 days to revoke, the agreement is not effective until that window closes, and the 7-day period cannot be shortened by agreement.

The OWBPA also sets content rules. The waiver must be written in plain language, must specifically refer to claims under the Age Discrimination in Employment Act, must advise you in writing to consult an attorney before signing, and must offer consideration beyond what you are already owed. In a group program, the employer must also give you, at the start of the consideration period, a written disclosure of the group covered, the eligibility factors and time limits, and the job titles and ages of those selected and not selected.

Two caveats matter. A defective OWBPA waiver invalidates only the federal age claim release, not the rest of the agreement, and workers under 40 get none of these timing rights. Also, under EEOC guidance you do not have to return the severance money before filing an EEOC charge or an age discrimination lawsuit challenging the waiver. That rule is specific to age claims: for Title VII, ADA, Equal Pay Act, or Ohio Chapter 4112 claims, some courts require returning the money first.

Accepting severance does not disqualify you from Ohio unemployment benefits, but it usually delays them. Under Ohio Revised Code 4141.31, in the version effective October 3, 2023, benefits otherwise payable for a week are reduced, dollar for dollar, by separation or termination pay covering that week, with the result rounded down to the next lower dollar. Holiday pay and bonuses are deducted the same way. Military severance pay is not deducted.

The allocation rule is what surprises people. If your employer does not designate which period a lump sum covers, Ohio attributes an amount equal to your normal weekly wage to the first week after separation and to each week that follows until the payment runs out. A lump sum equal to 10 weeks of pay therefore generally blocks about 10 weeks of benefits unless the employer allocates it differently, so ask how the payment will be allocated before you sign.

You cannot sign these rights away. Under Ohio Revised Code 4141.32, effective September 22, 1982, no agreement to waive Ohio unemployment benefits is valid, so a clause promising you will not apply is void. You still have to play it straight with the state: the Ohio Department of Job and Family Services Worker's Guide requires you to report severance pay as gross earnings when you file your weekly claims.

Many severance agreements include confidentiality or non-disparagement clauses. In McLaren Macomb, decided February 21, 2023, the National Labor Relations Board held that merely offering non-supervisory employees a severance agreement with broad clauses of this kind violates the National Labor Relations Act. As of July 2026 that decision still stands: the Board applied it in Prime Communications on April 7, 2026, and an administrative law judge applied it in the Detrex Corporation case in May 2026.

The picture could change. Two current Board members have signaled openness to reconsidering McLaren Macomb in a future case, so check the current state of the law before relying on it. Its coverage is also limited: it protects employees covered by the National Labor Relations Act, not supervisors, managers, independent contractors, or most public employees. In practice, narrow and time-limited clauses are more likely to hold up, and you can ask for mutual non-disparagement so the restriction runs both ways.

Severance agreements are negotiable, and the first draft is rarely the final word. You can ask about the amount, references or neutral job verification, help with COBRA health coverage costs, outplacement services, and mutual non-disparagement. Nothing requires your employer to say yes, but nothing stops you from asking. Before you sign anything, walk through this list: