On August 14, 2018, Governor Rauner signed the Government Severance Pay Act into law (Public Act 100-0895). The new law, which becomes effective on January 1, 2019, provides that severance pay provisions in government contracts or employment agreements may not exceed twenty (20) weeks of compensation. The law defines severance pay as “the actual or constructive compensation, including salary, benefits, or perquisites, for employment services yet to be rendered which is provided to an employee who has recently been or is about to be terminated.” The law also prohibits severance pay when the employee has been fired for “misconduct” as that term is defined in the Government Severance Pay Act.
