When you are laid-off from a job and receive severance pay it can impact your unemployment benefits. How severance pay is handled depends on state law. Different states have different policies regarding severance.
For example, receiving severance pay does not impact your benefits in California. You need to report the amount you receive, but it will not be deducted from your unemployment compensation. In New York, if you continue to receive the exact same benefits you received while working until you find a new job you would not be eligible for unemployment.
In Texas, severance will not stop receipt of unemployment benefits, but payments will be delayed until the payment's period of coverage has expired. Unemployed workers in Florida are not entitled to unemployment compensation for any week that the severance pay is equal to or greater than the weekly benefit. If severance is lower than unemployment, you would be paid the difference.
Even if severance is not deducted from unemployment benefits, you are required to report it when you file a claim.
Pay in Lieu of Notice
Similar to severance pay, pay in lieu of notice is wages paid to an employee who was laid off without notice when the employer was required to provide advance notification of a lay-off.
Check With Your Unemployment Office
Because laws vary from state to state it's important to check with your state unemployment office for how severance pay will be handled. You may find the information you need online or you will be able to find a phone number to call for assistance.
Don't wait to apply for benefits even if you're not sure about your current eligibility. It's important to get your claim in the system so you can receive the maximum benefits you are eligible for. Report your severance pay when you file the claim, and your unemployment compensation will be calculated for you.
Unemployment benefits, unemployment rates, compensation, unemployment offices, extended unemployment benefits and how to file for unemployment.
How to File an Unemployment Appeal
If your unemployment claim is denied by the state unemployment department or contested by your employer, you have the right to appeal the denial of your unemployment claim. Here's how to file an unemployment appeal.
DISCLAIMER: The private web sites, and the information linked to both on and from this site, are opinion and information. While I have made every effort to link accurate and complete information, I cannot guarantee it is correct. Please seek legal assistance, or assistance from State, Federal, or International governmental resources to make certain your legal interpretation and decisions are correct. This information is not legal advice and is for guidance only.