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New York Legislature Passes ‘No Severance Ultimatums Act’: What Employers Need to Know

By: Matthew Damm

What You Need To Know

  • The New York Legislature passed S372A, the “No Severance Ultimatums Act,” on June 1, 2026, and it now awaits Gov. Kathy Hochul’s signature. The act would give employees greater protections when reviewing severance agreements, requiring employers to update their severance practices. 
  • If signed, the law would take effect immediately, so employers should consider updating separation agreement templates and other communications now to reflect the new requirements.

New York’s S372A, the “No Severance Ultimatums Act,” provides employees who are presented with a severance agreement more time to review the agreement and limits employers’ ability to pressure employees into signing quickly. If signed by Hochul, the law would take effect immediately, requiring employers to revise their severance agreements and employee termination practices. 

Under S372A, any employer offering a current or former New York employee a severance agreement with a release of claims included must notify employees of the following:

  1. The right to consult an attorney before signing 
     
  2. A minimum 21-calendar-day period to consider the agreement 
     
  3. A seven-calendar-day period to revoke the agreement after signing 
     
  4. The fact that the agreement will not become effective or enforceable until the revocation period ends
     

The bill permits an employee to sign before the 21-day review period ends, but the employee’s choice to sign early must be voluntary. Employers cannot induce early signing through fraud, misrepresentation, threats, or by offering more favorable terms in exchange for a faster signature.  

Any severance agreement that fails to satisfy the law’s requirements would be deemed void and unenforceable in its entirety, including the employee’s release of claims, which is the primary benefit employers seek in exchange for severance pay. 

Under the Older Workers Benefit Protection Act (OWBPA), a federal law included in the Age Discrimination in Employment Act, covered employers are already required to provide employees age 40 or older with a 21-day consideration period (45 days for group terminations) and a seven-day revocation period in order to secure an enforceable release of all age discrimination claims. S372A’s requirements, however, apply to all employees, regardless of age, and to releases of all waivable claims, not just age discrimination claims.  

Steps Employers Can Take Now

With the possibility of an immediate effective date, employers should monitor developments closely, be prepared to act quickly if Hochul signs the bill, and consider taking the following steps: 
 

  • Have updated New York separation agreement templates ready to deploy if the bill is signed. Templates should include the right-to-attorney notice, 21-calendar-day review period, seven-calendar-day revocation period, and a clear effective date.  
  • Update scripts, emails, and talking points, and train management and HR staff to ensure severance offers are presented appropriately. Avoid language that could be viewed as pressuring the employee to sign a severance agreement or to sign before the full review period expires.