Any severance payment made by the employer is, strictly speaking, goodwill extended by the employer to the departing employee. The employers remain at liberty to subtract any amount such as loans or advances that the employee owes the company from a severance pay check. If the severance agreement or contract specifies withholding of only taxes from the severance pay, then the employee can technically file a suit for breach of that agreement, but the courts need not entertain such a suit..
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