University of Illinois System

Guidelines for Employee Separation Agreements

The University of Illinois System may wish to enter into a separation agreement with a member of the faculty or staff when it is determined that by resignation or retirement, a clear benefit to the organization would result. Such agreements are neither entitlements nor rewards for meritorious service to the U of I System. These guidelines do not apply to special retirement programs instituted by specific units and do not apply to settlement agreements. Universities may impose additional or narrower restrictions and are responsible for providing specific implementation procedures on their campuses. Deans, Directors or supervisors contemplating an agreement should consult with their respective university or system-level human resources office concerning the terms of the agreement.


  1. Acceptance of a separation agreement by an individual must be voluntary and free from coercion.
  2. Such agreements must provide a benefit to the University of Illinois System. Situations in which there may be a benefit include, but are not necessarily limited to the following:
    • the agreement results in a cost savings to the System;
    • the agreement minimizes risks of operational disruption;
    • the employee has agreed to release any potential claims against the U of I System;
    • for Staff employees, an agreement provides the employee in a layoff situation an opportunity to retire while avoiding displacing a less senior employee or otherwise avoid seriously disrupting unit and university or system-level operations; or
    • the employee relinquishes the right to a tenured or a civil service position or the right to a notice of nonreappointment (if an academic professional employee) and establishes a terminal date of employment that is favorable to the unit and the university or System Offices.
  3. Considerations in these agreements must conform to the following:
    1. Separation Date. The effective date of the employee’s separation from the U of I System must be as soon as possible, but not later than twelve months from the effective date of the agreement. The universities will require special approval based upon strong justification for any date more than twelve months into the future.
    2. Salary Increases. Salary increases contained within an agreement should normally be less than 6% per year. Any proposed increase in excess of 6% or more is subject to prior written approval by the relevant Chancellor or the President (or their designee).
    3. Summer Salary. Summer appointments for 9-month faculty may be negotiated and should be accompanied by a definition of duties.
    4. Payments. As consideration for a separation agreement, the employee may be paid a lump sum up to 25% of his/her annual salary. Any proposed payment in excess of 25% is subject to prior written approval by the relevant Chancellor or the President (or their designee) and may not exceed an amount greater than 20 weeks of compensation.* The office of Business and Financial Services (University Tax and University Payroll) should be consulted, as necessary.
    5. Sabbatical Leave. Sabbatical leave and/or waiver of return following a sabbatical may not be used in negotiating agreements.
    6. For union-represented employees, collective bargaining obligations will be followed and the proposed agreement must be presented to and approved by the union.
  4. The total cost of the agreement cannot exceed an amount greater than 20 weeks of compensation at the employee’s current annual salary.* Total cost is defined as the sum of all payments to the employee up to the separation date in excess of what would have been the normal salary cost incurred based on the employment rights as referenced in number 2 above. Therefore, total costs do not include vacation and sick leave payout or the employer’s portion of any early retirement penalty.
  5. Separation agreements for employees with pending complaints or ongoing investigations involving misconduct (including: sexual harassment, assault, or other such misconduct; domestic violence or stalking; workplace violence; material financial misconduct; and any conduct of a criminal nature that involves interpersonal violence) must have a clear and demonstrable benefit to the U of I System and its mission.  Such agreements may never include as a term or condition that the university will suspend, cease or forego conducting an investigation into allegations of wrongdoing or misconduct.
  6. Separation agreements are prohibited in situations where the employee has been fired for misconduct.
  7. All proposed agreements must be approved based on the reporting chain of the employee, up through the relevant university Provost or Chancellor. Pursuant to the U of I System's governing documents, all separation agreements require the signature of the Vice President and Chief Financial Officer/Comptroller or his/her designee on behalf of the Board of Trustees and must be allotted at least one week for review at the system level prior to the desired date of execution absent exigent circumstances.  All proposed agreements must be reviewed and approved as to form by University Legal Counsel.

*Note: The 20 week compensation limitation is based on the Illinois Government Severance Pay Act, PA 100-0895.  The 20 week compensation limitation does not apply for individuals employed by the department of intercollegiate athletics when the employee's compensation is funded by non-State appropriated funds, such as revenues generated by athletic events or activities, gifts or donations, or any combination thereof.

Reissued March 2020

For further information regarding the implementation of these Guidelines, please contact the following Human Resources offices:


Urbana: Illinois Human Resources:

Chicago: Faculty: 
Academic Professional and Civil Service: