You should give him many gifts from your flock, your threshing floor, or from your wine vat, [or] you should give him from whatever G-d, your G-d, has blessed you with. -- Devarim 15:14
To whom is one obligated to give severance gifts? (v. 14)
Talmud: (Kidushin 14b-15a). "When a slave who sold himself [into slavery] goes free, he is not given severance gifts. But when a slave who was sold by the courts goes free, he is given severance gifts."
Rabbi Elazar says: "Both of them are given severance gifts."
What is the rationale of the first opinion, that a slave who sells himself is not given severance gifts? The Torah states, "If one of your brethren...is sold to you [by the courts]...when you send him away... you should give him..." (v. 12-14). This suggest that you should give only to "him" (who was sold by the courts), and not to one who sells himself.
The other opinion (Rabbi Elazar) interprets the word "him" as meaning "him and not his heirs"
Rambam: One who sells himself is not given severance gifts. One who is sold by the courts is given severance gifts (Laws of Slaves 3:12).
When is the mitzvah of giving severance gifts in force?
Sefer Hachinuch: Only in Temple times, because the laws of Hebrew slaves are only practiced when the Jubilee year is observed. Nevertheless, even today, "Let the wise man hear and increase in learning" (Proverbs 1:5)—if one hires a Jewish person who serves for a long period of time, or even a short period, he should be given gifts when he leaves him (Mitzvah 482).
Minchas Chinuch: Sefer Hachinuch argues that, even today, a person should give severance gifts to one's employees out of a sense of decency. However, according to the first view in the Talmud, severance gifts are surely not given for reasons of decency, since decency would dictate that all of a person's staff should be given severance gifts, and the first view of the Talmud is selective in who should receive the gifts.
Since Rambam rules in favor of the first opinion in the Talmud (that the gifts are given selectively), it turns out that, according to Rambam, there is no basis to give severance gifts today.
However, in the final analysis, this is somewhat difficult to accept, since the Sefer Hachinuch rarely deviates from a ruling of Rambam without stating so explicitly.
Are severance gifts a type of earnings?
Pnei Yehoshua: Yes (Kidushin 16b, s.v. ve'iy iysa).
Shach: No. The gifts are a form of charity (Choshen Mishpat 86:3).
