Strictly speaking, there are no federal or state level "severance pay laws." Employers are nowhere obligated to offer them to employees who are about to be laid off. However, many companies have offered them for a variety of reasons. One of the most common is as "conscience money," to help longtime employees adjust to no longer having a job. Severance pay also is good for a company's prestige. At the same time, it is also seen as a bribe: once a former employee signs an agreement, he agrees to accept his severance pay, with the condition that he not sue or openly criticize his former employer. However, a severance pay law is insinuated in accordance with the Fair Labor Standards Act. This act stipulates that if a contract states that an employee or independent contractor should receive severance pay, he is legally entitled to it. Also, severance pay could be offered to former employees who have filed suit for discrimination.