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Can You Collect Unemployment if You Get Severance in New York?
If the state of New York considers the money and benefits you receive from a former employer when you involuntarily lose your job as severance, you can collect unemployment and severance simultaneously. The pay you receive for accrued sick days, paid time off or unused vacation does not usually impact your eligibility for unemployment insurance in New York.
The state of New York provides temporary income through unemployment insurance for eligible workers who lose their jobs through no fault of their own. A tax on employers funds the insurance program. The New York Department of Labor decides whether you're eligible based on the number of hours and the amount of the wages you received while you were working. Everyone receiving unemployment must actively look for a job and be "ready, willing and able to work."
When you involuntarily lose your job, some companies provide temporary income and benefits through a severance program. Severance is an employee benefit; it's not required by law. Severance policies typically provide you with the same salary and benefits you had while employed by the company for a period of time after your employment terminates. The amount of time you receive severance might vary based on your level in an organization or the number of years of service you have with the company.
For the state of New York to consider a program severance, a company must pay severance for the entire period the separated worker is eligible, even if she finds another job before the period expires. For example, suppose you involuntarily separate from your employer, and your employer provides your salary and exact same benefits for one additional month. For the New York Department of Labor to consider the program a severance program, you must continue to receive your salary and benefits for the full month, even if it only takes you a week to find a new job.
Unemployment and Severance
You can collect unemployment while you're receiving pay and benefits from a program the state of New York considers severance. If the pay and benefits you receive as severance stop when you find a job, that is considered a type of unemployment insurance program, not a severance program, and you are ineligible to collect unemployment from the state.
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Steve McDonnell's experience running businesses and launching companies complements his technical expertise in information, technology and human resources. He earned a degree in computer science from Dartmouth College, served on the WorldatWork editorial board, blogged for the Spotfire Business Intelligence blog and has published books and book chapters for International Human Resource Information Management and Westlaw.
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