What does "in lieu of notice pay" mean?

Payment in lieu of notice is when an employer compensates an employee for the time they would have been given notice of termination. Failure to provide this payment can result in civil penalties and potential lawsuits for the employer. This payment may be required by law, company policy, or employment contract. For example, in Maryland, an employer is not required to allow an employee to work the termination notice period or pay the employee for the time they are not allowed to work, unless it‘s provided for in an employment contract, agreement, or policy.