Legal Question in Employment Law in California
Reduced benefits due to severance pay?
My company and I agreed to end my employment there. To avoid any contention of wrongdoing on their part, I was offered a nominal severance package totaling 4 weeks of pay. To avoid any further dispute with them I agreed to accept this waiver and the associated severance. I also was paid remaining accrued vacation time. I plan to file for unemployment benefits and the EDD form asks about me to divulge vacation pay I received and any severance payments I expect to receive. Considering the above circumstances relating to the severance agreement, am I required to report this and the vacation pay to EDD? Will my unemployment benefits be reduced or deferred as a result? And if they are reduced, would this be on a weekly basis or total dollars offset against unemployment benefits? In other words, would I be eligible for unemployment benefits (a) immediately, (b) after the 4 weeks are up, or (c) only after the value of the severance is offset against the unemployment benefits?
2 Answers from Attorneys
Re: Reduced benefits due to severance pay?
Failure to report the severance and vacation pay could result in serious penalties against you, including having to return any unemployment checks you received. Vacation pay will not reduce your benefits because it is accrued income already earned. How you receive the severance will determine if you can immediately receive benefits. If your severance is paid in a lump sum, you should get them now. If you receive the severance in the form of a salary continuation, you will not get unemployment benefits until the severance ends.
Re: Reduced benefits due to severance pay?
you must report it. your best bet is to apply early and report everything.
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