Can I collect unemployment benefits if I was laid off during a leave of absence?

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Can I collect unemployment benefits if I was laid off during a leave of absence?

I had returned to work for one day after being on paid family leave. I then took baby bonding time and while on leave the company decide to close. As a result, I became a dislocated worker. The company offered a separation package which included 6 months of health benefits, pay for each year employed, and an additional 25 weeks of wages. I recently was denied benefits on the basis that severance pay is a “gift” from the company and not earned wages. If I received a W-2 and was taxed for the money received, shouldn’t I still qualify for benefits? What info should I include if I appeal?

Asked on February 11, 2011 under Employment Labor Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unemployment law and how it relates to unemployment benefits is very confusing sometimes and it comes down to how the law is decided by the powers that be.  In California the issue has been decided by the Courts and is not based on any statute.  And it was decided that severance pay is not wages for unemployment insurance purposes. Like I said: there is no specific code section in the California Unemployment Insurance Code which declares that severance pay is not wages.  The authority for doing so is based on a case decided by the California Supreme Court in 1965.  Seek help from an attorney in your area to confirm.  Good luck.


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