Severance and Unemployment in New York City – What You Need to Know
DID YOU KNOW THE TIMING OF SEVERANCE PAYMENTS CAN AFFECT YOUR ELIGIBILITY FOR UNEMPLOYMENT INSURANCE IN NEW YORK?
As you may know, when you are fired from your job, you are often eligible for unemployment insurance. Although it is not required if you are terminated from employment, many employers will pay employees “dismissal” or “severance” pay in exchange for a release of potential claims against the employer. If you are offered and accept dismissal or severance pay, the timing of payments can have an important impact on your eligibility to also receive unemployment insurance. Specifically, as long as you do not receive any dismissal or severance pay until the 31st day after your last day of work, you remain fully eligible for unemployment insurance (as long as you otherwise qualify).[1]
WHAT IF MY EMPLOYER PAYS ME FOR UNUSED VACATION PAY OR OTHER PAID TIME OFF?
Payment of accrued, but unused, vacation or paid time off within the first thirty days after you are terminated does not affect your entitlement to unemployment insurance so long as you receive dismissal or severance pay (if any) on or after the 31st day after your employment ends.[2]
ARE THERE OTHER TYPES OF PAYMENTS THAT DO NOT INTERFERE WITH MY ELIGIBILITY FOR UNEMPLOYMENT INSURANCE, REGARDLESS OF WHEN THEY ARE PAID?
Yes, in addition to payment within the first thirty days after dismissal of unused paid time off, receipt of payments for pension, retirement, and health insurance are not the type of dismissal or severance pay that can affect your eligibility for unemployment insurance.[3]
ARE THERE ANY OTHER WAYS IN WHICH I MAY STILL RECEIVE UNEMPLOYMENT INSURANCE EVEN IF I RECEIVE DISMISSAL OR SEVERANCE PAY SOONER THAN THE 31ST DAY AFTER TERMINATION?
Yes, if the dismissal or severance pay you immediately receive is less than your unemployment insurance eligibility, you may still be entitled to the difference between any dismissal or severance pay and unemployment insurance.[4] In addition, if you remain unemployed after your dismissal or severance pay runs out, you may be eligible to receive unemployment insurance.[5]
There are many variations and additional details applicable to the basic principles described above. If you would like to discuss your situation with us, please feel free to call or e-mail us at any time. You will be on the phone with an attorney within 24 hours.
[1] https://www.labor.ny.gov/ui/claimantinfo/dismissal-severance-pensions-faq.shtm#:~:text=A%3A%20You%20may%20be%20eligible,maximum%20weekly%20benefit%20rate%3B%20or
[2] Id.
[3] Id.
[4] Id.
[5] Id.