Effect of Unemployment Benefits

maryfmurray

We are currently considering a type of "buyout" for an overabundance of earned vacation time that has accrued for some employees over several years. Since we do not have a severance package or policy; we are trying to create new ideas on how to use "old time". The current one suggested is the buyout but how would this effect an employee if they left and wished to collect unemployment, do they need to wait until full payment of vacation hours are complete before unemployment benefits kick in?

System

Their employment ends when they walk out the door, unless you agree otherwise. You're simply paying them money, not extending their employment.

James Sokolowski
Senior Editor
M. Lee Smith Publishers

sandra_d

A few years ago we terminated a few people with severance agreements, and they filed for unemployment benefits. Although they were found eligible for unemployment, they didn't actually collect until several weeks / months later (if they were still not working) because the severance was considered income to them. Basically, if their regular income was $500/week, and their severance was $2000, they didn't receive unemployment benefits until week #5 after their separation. I know this is a simplistic example, but hopefully you get the point. I'm in Minnesota - don't know how other states would handle the situation.

Don D

Sandra is right. Laws vary from state to state. Our state, for example, does not even consider such things as severence or vacation pay. Some states do. Nor does our state consider holiday pay if it occurs during a week where a layoff occurs. Don't trust any answer on this one unless you get it from your local UI office from at lease the supervisory level.