Can unemployment benefits be denied for the time period that severance pay covers?
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Can unemployment benefits be denied for the time period that severance pay covers?
I am being required to sign a waiver or “release of claims” to obtain severance pay.
Asked on November 26, 2011 under Employment Labor Law, Georgia
Answers:
M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The general rule is that yes, you can collect unemployment if you're given a severance package. The reasoning is that severance pay is not considered “wages” that would otherwise count against your right to unemployment benefits. However, sometimes there is a temporary delay in eligibility for unemployment insurance depending on how the severance is paid out. If it is payable in a lump sum it should not affect your unemployment benefits; if it is paid over time as though you are still on the payroll it may delay your ability to collect.
As for your release of claims waiver, it sounds as though your employer is requiring that you be paid severance only if you sign this waiver. A release of claims is a contract “waiving,” or giving up, any potential legal claims you may have against the employer, either now or in the future. These contracts are generally legal and enforceable. However, the right to collect unemployment benefits cannot legally be waived.
If you have any further questions, you should sit down with an employment law attorney in your area.
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