A more thorough explanation:

Severance pay is a sum of money that an employer pays to an employee who has been involuntarily terminated from their job. This payment is usually not required by law, but some employers offer it as a way to attract and retain employees.

The terms of severance pay are typically outlined in the employment contract and can vary based on factors such as the employee's experience and length of employment. In some cases, state or federal law may require employers to provide severance pay or a certain amount of notice before termination.

For example, the Worker Adjustment and Retraining Notification Act (WARN) requires certain employers to provide either severance pay or 60 days' notice before laying off a large number of employees. This law helps to protect workers who may be suddenly and unexpectedly out of work.

Another example of severance pay might be a company offering a departing employee a few weeks' worth of pay as a way to ease the transition and provide some financial support during the job search process.

Overall, severance pay is a way for employers to show appreciation for their employees and provide some financial support during a difficult time. While it is not always required, it can be a valuable benefit for workers and a way for companies to build loyalty and goodwill.