Specifically for Texas, New York or California... Does lump sum severance impact unemployment benefits?
10 replies (most recent on top)
For TX, #6 in particular. The wording is very encouraging.
However, it's always best to check with a lawyer that specializes in employment law. It might just be worth a couple hundred $$ either way.
Involuntary Work Separations
A work separation is involuntary if initiated by the employer. An employer initiates a work separation by taking some kind of action that makes it clear to the employee that continued employment will not be an option past a certain date. In such a situation, the employer has more control than the employee over the fact and the timing of leaving the work. There are many ways in which a work separation can be involuntary:
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Layoff, reduction in force, or downsizing - work separation due to economic inability to keep the employee on the payroll.
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Temporary job comes to an end - work separation due to work no longer being available because the job is simply finished. This includes successful completion of PRN or on-call, as-needed assignments, if no further work is available the next workday.
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Discharge or termination for misconduct or "cause" - work separation that the employer views as somehow being the claimant's fault.
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Resignation in lieu of discharge - same as discharge, but the employer gives the employee the option of resigning as a face-saving option.
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Forced retirement - may be akin to an economic layoff or a discharge for cause, but in this situation, the employee is allowed to qualify under a retirement plan.
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"Mutual agreement" - in most cases, this form of work separation is viewed as involuntary, since it is usually initiated or encouraged by the employer.
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Unpaid suspension of four days or longer - see "Unpaid Suspensions" in the article "Unemployment Insurance Law - Qualification Issues" for details.
https://twc.texas.gov/news/efte/types_of_work_separations.html#invol
in massachusetts, you can collect day one, regardless of the severance
In FL, it CAN impact unemployment benefits. I received a severance package and requested unemployment. I was denied because my payout was "too large", however, they said I can re-submit after a few months. Someone I know received unemployment benefits, but their payout was smaller.
In TX, there's some stuff I've seen that says that, if you had to sign something (like sign away a right to sue) and if it was the company's idea, not yours, then you are eligible for unemployment the day you are unemployed. Not sure how the "voluntary" aspect of this will play into it. But for any of the past RIF's, you were eligible the next day in TX.
dont know why this ? comes up so much. real simple in every state. buyout package is voluntary quit. unless you quit for good cause, i. e. disability or forced quit with employment law violation on part of management, you will not get unemployment. if you decline all packages and are then riffed, you are entitled to unemployment. not a complicated issue. UE office corresponds with VZ to verify eligibility.
Home > New York Employment Legislation > New York Unemployment Benefits No Longer Available to Former Employees Receiving Severance
New York Unemployment Benefits No Longer Available to Former Employees Receiving Severance
By Christopher Collins on January 10, 2014
Posted in New York Employment Legislation
Effective January 1, 2014, former employees in New York are, in most cases, ineligible for unemployment insurance benefits while receiving severance pay, pursuant to a recent amendment to New York’s Unemployment Insurance Law. The amendment was enacted as part of a package of reforms aimed at returning New York State’s Unemployment Insurance Trust Fund to solvency in the wake of the economic recession.
The amendment defines “dismissal pay” as “one or more payments made by an employer to an employee due to his or her separation,” excluding “payments for pension, retirement, accrued leave, and health insurance or payments for supplemental unemployment benefits.” Under the new law, an individual cannot obtain unemployment insurance benefits during any week in which his or her dismissal pay exceeds the maximum weekly unemployment benefit rate – currently $405 and increasing to $420 in October 2014. Ineligibility for unemployment insurance benefits will continue for each week in which the weekly severance payment exceeds the maximum weekly unemployment benefit rate. In the event the employer structures the severance payment as a lump sum, the New York State Department of Labor will employ a formula (using the former employee’s prior actual or average weekly pay) to determine the number of weeks of ineligibility for unemployment insurance benefits.
The new disqualification provision only applies to applications for unemployment benefits filed after January 1, 2014, not to previously filed claims.
But there is a catch. The disqualification does not apply when the initial (or lump sum) severance payment is made more than 30 days after the last day of employment. In that event, the former employee can collect unemployment benefits immediately.
New York employers should keep these new unemployment disqualification provisions in mind when designing separation packages and communicating with former employees. The timing of severance payments, in particular, is a crucial consideration.
https://www.laboremploymentlawblog.com/2014/01/articles/new-york-employment-legislation/new-york-unemployment-benefits-no-longer-available-to-former-employees-receiving-severance/
In NJ, if you're involuntarily let go, you may claim unemployment after last severance week payout, not during.
If you volunteer to take the package, you forfeit the benefit because you essentially quit.
Therefore, if you're RIFd, you have the right to claim. If you volunteer, you don't.
Read the particular details on your state's department of labor website to understand the process. Laws may differ in other states, so take 5-10 mins to scope out the details accordingly.
It’s not necessarily a matter of in what fashion the severance payment is made, but rather whether or not you can even file for unemployment benefits. Some states make a distinction between voluntarily leaving your job and being told to leave your job insofar as collecting unemployment. In NJ, if you volunteer to be let go, you can’t collect unemployment.
If you take the package, you "quit" and were not fired in many states. Call and ask.
I was let go in 2000, so take this with a grain of salt as I am not 100% sure that I completely remember
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let go in California
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severance was expressed as number of weeks, converted into hours and multiplied with my calculated per hour rate
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number of weeks was counted as payroll, so if i got 4 weeks of severance and if i got laid off on 1/1 the unemployment office considered me as on payroll through 2/1
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was eligible for unemployment starting 2/1
I hope someone else will chime in with more precise info but this is what I remember