If you were recently laid off – but received a severance package – you may be wondering whether you are also legally entitled to receive unemployment benefits. Since unemployment compensation caps at $275 per week, unemployment benefits are usually significantly less than most severance packages. This often prevents people from collecting unemployment while they are receiving severance payments. There are some exceptions, however, and you may still be eligible for at least some of these benefits.
On June 29th, 2011, Florida Governor Rick Scott signed a law that prohibits an employee who is receiving severance pay from seeking unemployment compensation. The law specifically states:
A worker losing his or her job after August 1, 2011 may not receive unemployment compensation any week in which the severance pay is equal or greater than the weekly unemployment benefit amount.
There is a major caveat to this law: there is no reduction in the total benefits or available credits on an unemployment claim because of severance. This means that after severance pay has been depleted, you can collect state and federal unemployment benefits. In addition, if a week of severance pay is less than the weekly unemployment amount, you may still be eligible for an unemployment payment, which would be reduced by your severance pay amount.
Whatever your situation, it is important that you apply for unemployment benefits as soon as you are laid off, even if you will be receiving severance pay. The job market is competitive. Florida also reduced the maximum number of benefit weeks from 26 to 23, so the sooner you file for unemployment benefits, the better off you will be.
If your severance package comes as a lump sum, then the issue of filing for unemployment benefits is an easy one, since there isn’t any effect on them. Unfortunately, many employers want to keep employees on payroll, despite the termination. This way, they can pay severance on a weekly or monthly basis. The issue is the same if you choose to use accumulated paid vacation, which renders you as essentially still employed, and therefore unable to receive unemployment benefits.
Severance agreements often require a separation and release agreement. If that agreement happens to state that you are voluntarily leaving the job, it could affect your eligibility for unemployment benefits. The best way to ensure that your severance package does not result in an ineligibility for unemployment is to speak with a knowledgeable Florida employment attorney as quickly as possible.
If you have been terminated and received a severance agreement, it may affect your ability to collect unemployment in the state of Florida. To understand more about your employment rights, as well as protect your ability to collect the money you need during this difficult time, it is important to speak to an experienced Miami employment lawyer immediately. Call the Law Office of Keith M. Stern, P.A. today at (888) 315-8771 for a free consultation. Losing your job is never easy, but we can make it easier.