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Is There a Legal Difference Between Lump Sum Severance Payment and Payments Over Time?

If you are offered a severance package, it may be a lump sum a certain number of days after signing the agreement, or it may be continued salary payments through regular payroll for an agreed number of weeks or months.

Though there are practical implications for you financially, legally, these are no different.  For purposes of unemployment, for example, the key question is not how the money is paid, but whether you signed a release of claims.  If you signed a release of claims, you should be able to collect whether it is a lump sum or salary continuation (though be advised that the DUA is sometimes confused by this, and you should be prepared to show them your severance agreement).

The other practical implication is that if you are on salary continuation and your employer wants to claim you have violated some term of the agreement (i.e., non-disparagement), all they have to do is stop making the payments.  In contrast, if they have made a lump sum payment, they would have to bring a claim and actually prove the violation in order to recoup the severance payments.

For these reasons, it is preferable from the employee's perspective to receive a lump sum payment, but it does not substantively change your rights if the employer prefers salary continuation.


Learn more here about non competes and severance agreements.

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  • Home
  • About
    • Slnlaw Offices
    • Fees and Payment
    • Privacy Policy
    • Publications and Interviews
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Andrew Silvia
    • Elijah Bresley
  • Reviews
  • Contact
  • Blog
  • Employment Law Solutions
    • Employment Law MA
    • Discrimination in the Workplace
    • Employment Termination
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
    • Equal Pay Act
  • Estate Planning
    • Massachusetts Wills and Trusts
    • Why You Need an Estate Plan
    • Massachusetts Estate Tax
    • Inheritance Tax
    • How to Make an Estate Plan
  • Business Law Solutions
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Massachusettts Unemployment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs