Can I receive unemployment insurance from this type of severance agreement?
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Can I receive unemployment insurance from this type of severance agreement?
The severance agreement and
release states that the company
and associate have agreed to
terminate associate’s employment.
It also states that the company
has voluntarily agreed to provide
severance benefits to the
associate. It also says that the
company and associate have a
desire to resolve all matters on a
mutual understanding. What does
all of this means, and will this
agreement keep me from getting
unemployment?
Asked on September 29, 2017 under Employment Labor Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If you agreed to the termination of your employment, you left employment voluntarily; a voluntary separation from employment (equivalent to resigning or quitting) makes you ineligible for unemployment insurance. So if you can, get the language of the agreement changed to take out any reference to a voluntary agreement to terminate your employment; a severance or separation agreement does not need to state that, can simply state you are agreeing to give up any right to sue your employer in exchange for the payment.
Even if the above happens, generally your receipt of unemployment is delayed or suspended until you stop receiving severance. E.g. severance is typically paid out over time today: as long as you are receiving it, it is the functional equivalent of still being employed and you woudl not receive unemployment.
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