When laid off from an employer, any payments granted other than what has been earned is severance pay. Severance packages are not required by any federal or state laws. Because of this, severance package guidelines are stipulate by the company to the employee specifically. There are no overall standards to a severance package. Though a common payment is one weeks pay per the number of years worked. But, the form of severance can also be insurance, a bonus lump sum, electronics or stocks. It is usually predetermined in the contract of the employee. Often times, severances made outside of contract are to settle disputes with disgruntled employees and avoid lawsuits. With this, agreements can become part of a severance package.