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Employment Law/Unemployment benefits and severance pay

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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
Josh:

Tell your Mom not to worry.  While there are variances among the states in claim and hearing procedures, amounts of benefits and other details, the standards for receiving unemployment compensation are remarkably similar in all the states.  One of the principal qualifications in every state is that the person claiming unemployment benefits has lost their job through no fault of their own.  Receipt of severance benefits from the employer is not relevant to the determination of a claim.  My guess is the Labor Relations manager made the statement about not contesting unemployment benefits simply to reassure your Mom, because in the situation you've described, where the person's job is being eliminated by the company, the employer almost certainly would not succeed in contesting eligibility anyway.

One other requirement consistent across the states is that the claimant must be available for and actively seeking a new job. So be sure she undertakes an active and serious job search before she applies.

Here is a link to some good information from the Illinois Department of Employment Security, which administers that state's unemployment insurance program:

http://www.ides.illinois.gov/page.aspx?item=888

I hope you and your Mom find this helpful.  

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Frank C. Magill

Expertise

I can answer questions about any U.S. labor or employment law question. I cannot answer questions about non-US law. I am not a specialist in employee benefit law (ERISA and HIPAA) or Workers' Compensation law, but will do my best to point questioners toward good resources availabe online. Expertise includes, without limitation, EEO/Affirmative Action/Employment discrimination (Title VII, Age Discrimination in Employment Act, Americans With Disabilities Act, GINA, Fair Credit Reporting Act as applied to employment); Fair Labor Standards Act; Texas labor code; Family Medical Leave Act; employee compensation; discipline and dismissal; force reductions, severance pay programs and administration; collective bargaining, union representation, grievances and arbitration, National Labor Relations Act and National Labor Relations Board; employee handbooks; staffing; dispute resolution outside of traditional labor agreements; employee communications; employment policies and compliance programs; codes of ethics; employment or labor litigation.

Experience

30+ years experience as corporate counsel for a Fortune 100 telecom company, specializing in labor and employment law issues. In addition to providing day-to-day advice to my company's internal HR leadership and staff, I've represented the company in numerous labor arbitration cases and at the bargaining table.

Organizations
Texas, Illinois and Missouri state bars

Education/Credentials
J.D. 1979, Harvard Law School. B.A., Summa Cum Laude, 1976, Illinois Wesleyan University.

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