On March 4, 2025, the New York State Senate passed S.372, dubbed the “No Severance Ultimatums Act”—a groundbreaking bill that, if signed into law, will set new minimum standards for severance agreements. It requires New York employers to:
- Give employees at least 21 business days to review severance agreements (waivable by the employee) and a mandatory seven-day revocation period after signing.
- Inform employees of their right to consult an attorney before signing.
These rules will apply to all severance agreements, except those under collective bargaining agreements. The bill now awaits approval in the New York State Assembly (A.6480).
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How It Differs from Current Law
Federal law, via the Older Workers Benefit Protection Act (OWBPA), already mandates a 21-day review period (or 45 days for group layoffs) and a seven-day revocation period for employees aged 40+ releasing age discrimination claims under the ADEA. But the No Severance Ultimatums Act goes further, extending these protections to all New York employees—regardless of age—and to all severance agreements, not just those waiving age-related claims.
This aligns with a growing push for transparency in employment contracts, mirroring efforts to curb nondisclosure clauses in settlements. It aims to stop employers from rushing employees into signing and ensure they have time to weigh their options and seek legal advice.
How Other States Handle Severance
New York’s proposal is the first to mandate a 21-day review and seven-day revocation for all severance deals, but other states have related protections:
- California: Since 2022, SB 331 gives employees five business days to review severance agreements and requires notice of their right to an attorney—no revocation period required.
- Minnesota: The Minnesota Human Rights Act (MHRA) bars severance agreements from waiving future claims. For existing discrimination, harassment, or retaliation claims, employees can rescind within 15 days (written agreements) or 45 days (electronic agreements).
- New York (Current): For settlement agreements with nondisclosure clauses resolving discrimination, harassment, or retaliation claims, state law already mandates a 21-day (waivable) review and a seven-day revocation period. The new Act broadens this to all severance agreements.
What Employers Should Do Next
If enacted, the Act takes effect immediately. New York employers must act fast to comply, as non-compliant severance agreements will be void and unenforceable. Steps to take:
- Update agreements to include a 21-business-day review period and a nonwaivable seven-day revocation window.
- Add clear notice of employees’ right to consult an attorney.
- Adjust timelines, as these requirements could stretch severance negotiations.
Employers should brace for longer processes and plan severance offers accordingly.