Can I receive unemployment benefits in Connecticut if I am receiving severance from my last job?

Losing a job is a difficult time in any person’s life. In the immediate aftermath, you are left to deal with all the questions about how and where to proceed in navigating the job market. Amid that confusion, employers will also sometimes offer severance packages and request the employee to sign documents upon their discharge. The decisions you make during this time can have a profound effect on your legal rights moving forward.

Claiming Unemployment Benefits

When you are involuntarily terminated from your employment through no fault of your own, your employer should provide you with Form UC-61 from the State of Connecticut Department of Labor. You should use the information contained on the document to accurately respond to the questions contained in the online application for unemployment benefits. It is important that you file your initial claim for unemployment benefits as soon as possible. Unemployment benefit payments are generally not made retroactively. You will need to file an initial claim and then weekly claims to certify that you continue to be unemployed, report job search activities, and confirm that you are ready, willing and able to work, among other things.

In your initial claim for unemployment benefits, there will be a question concerning the gross amount of the severance payment and how many hours or days the payment represents. Section M. of the UC-61 will contain this information. Normally, an applicant’s unemployment benefits will be reduced by the severance payments. The severance payments are allocated to the weeks following the separation of employment.

The next question, however, asks whether any or all of the severance payment was conditional upon signing a separation agreement waiving your right to file a lawsuit against the employer. If the answer is yes, you will need to supply the Department of Labor with a copy of the separation agreement.

Eligibility for Benefits 

Pursuant to Connecticut General Statutes Section 31-236(a)(4), an individual is ineligible for benefits for the weeks he or she receives severance “unless the employee was required to waive or forfeit a right of claim independently established by statute or common law against the employer as a condition of receiving the payment.” Accordingly, if the severance payments are contingent on an agreement not to sue the employer, your unemployment benefit should not be reduced. If you were required to waive a common law or statutory right to receive the severance payment, it will not be deducted from your weekly benefit payment. If you did not waive such rights, then it will be deducted from your weekly benefit payment.

For instance, if the separation agreement you signed contains language such as, “in order to be eligible to receive the payments and any other benefits described herein, you are required to agree to the terms contained in this letter, including the General Release, indicate your agreement by signing and returning this letter,” you may still qualify for unemployment benefits.

To protect your claim, it is imperative that you supply the Department of Labor with your initial claim for unemployment benefits and the signed separation agreement as early as practicable.

If you have been recently terminated through no fault of your own and have questions about your eligibility for unemployment benefits in Connecticut or if you need assistance in negotiating a severance agreement, please contact Attorney Joseph Maya of Maya Murphy, P.C. at (203) 221-3100 or JMaya@mayalaw.com.