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A lump-sum payment made to an employee who has worked for a considerable period and then retires. It is also called severance allowance, retirement consolation payment, retirement merit compensation, etc. The Labor Standards Act stipulates the minimum standard that the employer shall pay severance pay equivalent to 30 days or more of the average wage for each year of continuous service of the employee (Labor Standards Act Article 34). Regarding the nature of severance pay, there are theories such as merit compensation theory, deferred wage theory, and livelihood security theory, but the theories and precedents in our country adopt the deferred wage theory. The basic position of this theory is that severance pay is a posthumous payment at the time of retirement of wages that were not paid to the employee.