Can You Collect Unemployment Benefits While Receiving Severance Pay in California?

The relationship between unemployment benefits and severance pay can be a bit confusing, especially when it comes to California's unique labor laws. Generally, people are advised to choose one option over the other, but recent clarifications from the California Employment Development Department (EDD) suggest a more nuanced approach.

!Understanding the Usually Precedent Typically, when laid off, employees are advised to take severance pay or apply for unemployment, but not both. Severance pay is usually considered earned income and should be reported if receiving unemployment benefits. Failure to report can result in reduced unemployment benefits based on the amount of earned income. !Employer-Specific Advice Your employer may provide specific advice on what to do in your situation. They may encourage you to apply for unemployment benefits while they issue a lump sum severance payment. It is crucial to follow your employer's guidance and report any severance payments appropriately. !California-Specific Guidelines California unique unemployment laws may allow for collecting unemployment benefits without reducing them by severance pay, especially if the severance pay is a one-time lump sum and not ongoing. According to a representative, severance pay does not count as income for the purposes of reducing unemployment benefits. !State-Specific Variations The rules can vary significantly between states. For accurate guidance, always check the specific state's laws. New Jersey, for example, allows for simultaneous unemployment and severance payments without affecting unemployment benefits. !Waiting Period Considerations Some states may have waiting periods that apply before unemployment benefits are paid out. If your severance pay is ongoing and structured like a paycheck, it might affect your unemployment benefits. !Legal Disclaimer The information provided is not legal or professional advice. For the most accurate and up-to-date information, consult a legal professional or the U.S. Department of Labor.

In conclusion, while collecting unemployment benefits alongside severance pay can be permissible in some states, including California, it is advisable to consult your employer and local labor laws to ensure compliance and receive full benefits. Always ensure that any income received is reported accurately to prevent complications with your unemployment claim.