You are here:

Employment Law/Unemployment benefits and severance

Advertisement


Question
Hi,

After 35 years, my Mom is being separated from her job because they are essentially eliminating her position. She is actually employed by a hospital. The Labor Relations dept. are offering her six months severance pay, which she was told is the minimum required for someone with her tenure (35 years).

Labor Relations also told her that "we will not contest unemployment benefits" (probably as an inducement to get her to go quietly). This triggered a question for her: Can she still collect unemployment benefits even though she is getting a severance??

Also, is there any advice you could provide regarding how she should request the severance payment to be structured so that she can still collect unemployment? (for example, made as one lump payment versus spread over six months  etc.?

Note: My Mom is in Illinois, but we are asking this as a general question and of course it's understand there may be variance between states.

Thank you so much in advance, Josh

Answer
Unemployment can be collected but only after the severence is paid.  If she collects the severence in a lump sum than unemployment can be collected the next month after the severence is paid. If she collects 6 months on a month to month basis than unemployment cannot be collected until after the severence is paid out. If the severence is less a month than her regular wages she may be able to get partial unemployment.

The other side is a lump sum will mean more taxes taken out than receiving it in 6 monthly sums. If the taxes are not owed than she will get a refund when she files her taxes. Also if the 6 months severence goes over into a different year it will make a difference between monthly payments and a lump sum on her tax return for the years.

Shirley

Employment Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Shirley McAllister, CPP, PHR

Expertise

I can answer questions about payroll laws and payroll tax laws and Human Resource laws and agencies. I can answer federal payroll and human resource law questions and most states; I do not have a knowledge of the local taxes for cities and counties within the state. If and when I can I will try and send you the website where you can reference the answer and where you can obtain more information as well as a contact number if needed for that particular agency. Some agencies I have worked with are IRS, Department of Labor (federal and state), Revenue Canada (and provincial governments), Inland Revenue, OSHA (0ccupational Safety and Health Administration); Social Security Administration and National Child Support as well as other agencies in Payroll and Human Resources. Some Laws I am particularly familiar with are FLSA (Fair Labor Standards Act), ADA (Americans With Disabilities Act), FMLA (Family Medical Leave Act) COBRA (Consolidated Omnibus Reconciliation Act ) , QDRO's, QMCSO's, and other support orders and garnishments, USERRA (Uniformed Services Employment and Remployment Rights Act,PPA Act (Pension Protection Act of 2006, As well as most other employment type acts. I am also well versed in the Title V Civil Rights Act and the HIPAA (Health Insurance Portability and Accountability Act).

Experience

30 years in Payroll and Human Resources

Organizations
SHRM (Society of Human Resources) APA (American Payroll Association) DOLEA (Department of Labor Employers Association) CPA (Canadian Payroll Association) NAPW (National Association of Professional Women) The Mentoring Network

Education/Credentials
PHR Certification in Human Resources CPP Certification in Payroll in U.S. Payroll Administrator and Payroll Supervisor certification in Canada

©2016 About.com. All rights reserved.