Loans

Question:

If I am providing an employee severance pay are they still eligible for UI benefits?

Answer:

YES, though there are some exceptions to this rule. It is best, as an employer, to always expect an employee to collect UI benefits if they were laid off. When a former employee receives severance pay, it may affect how much they can collect in unemployment, or when they can start collecting depending on state law. Each state has a different set of guidelines they follow.
In some states, such as California, collecting severance will not change an employee’s benefits. In Alabama, an employee is eligible to collect UI benefits, but their weekly benefit rate will be prorated based on their severance payments received. In Arkansas an employee is not eligible to collect UI benefits the week they receive severance; meaning if an employee gets a lump sum they are only ineligible the week the lump sum is received, if they receive a payment each week, they will be ineligible each week until payments stop. In Massachusetts, receiving severance means an employee is not eligible to collect UI benefits unless they receive a lump sum and are required to sign a release of claims.
Though the states mentioned above are just examples of the nuances and variances to the state laws the majority of states will award UI benefits even if severance is given, but the claimant’s weekly benefit rate or first week eligible to collect may be impacted.
Always check your state laws, or with your Corporate Cost Control Account Executive if you have questions about what may make a claimant eligible or ineligible for benefits.


Contact CCC to see how we can save your organization time and money.
Contact our Sales Team
(800) 207-6926

Featured Videos

View All Videos

Latest News

Close

Sales

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Check the boxes below if you wish to receive information on any of the following:

Unemployment Cost ControlTax Credits & Incentives (WOTC)Employment / Wage Verification

Your Message:

Employment & Income Verfication

Your Name:*

Title:

Company Name:*

Company Address:

Company City:

Company State:

Company Zip:

Number of Employees:

Your Email:*

Phone Number:*

Fax Number:

Your Message: