Disclose or not?

October 18, 2011 11:28 AM

Do I have to disclose a confidential severance package to unemployment if the terms of the package limited both parties to confidentiality?

I got one month of severance when I was let go, and i have to do an interview with unemployment to verify my claim. The terms of the severance state that both I and my employer are bound by non-disclosure of the severance I got. Do I need to tell unemployment about this?

posted by anonymous to Work & Money (9 answers total)

this probably depends on what state, country, or even continent you are in.

that said, and assuming this is in the USA, i'd wait until they ask and then explain that you signed a nondisclosure form. have the company contact info handy to give to them. you could preemptively contact your former employer and ask if they could give you a "we laid you off, no hard feelings" kind of letter to show the unemployment folks.
posted by rmd1023 at 11:37 AM on October 18, 2011

One month of severance isn't, imho, enough to really worry about. I can't imagine that it would affect any unemployment benefits.

The non-disclosure is kind of odd, considering the size of the severance. Unless, of course, one month is far beyond what they normally offer exiting employees, and they want their "largesse" kept quiet.
posted by Thorzdad at 12:20 PM on October 18, 2011

Check with your state UI bureaucracy.

In CA,

Severance pay is not wages for unemployment insurance purposes. There is no specific code section in the California Unemployment Insurance Code which declares that severance pay is not wages. We cite Section 1265 when we state that severance pay is not wages. The authority for doing so is based on a case decided by the California Supreme Court in 1965.

Which means the CA EDD can't and won't deny you unemployment benefits if you are also receiving severance payments from your former employer.
posted by notyou at 12:25 PM on October 18, 2011

Hmm. I missed the gist of the question, apparently.
posted by notyou at 12:28 PM on October 18, 2011

It depends, even in CA. If the severance was paid as a continuation of salary, it may count as salary for the purposes of unemployment. One of the characteristics CA looks for to determine salary vs severance: was it paid on your next regular payday after termination. If I remember correctly, the worst this can do vs. unemployment is delay your eligibility.
posted by zippy at 1:11 PM on October 18, 2011

Have people really gone to jail for lying to unemployment? The only cases I know about did not involve jail but paying back the benefits and forgoing future eligibility for a period of time.
posted by Obscure Reference at 4:24 PM on October 18, 2011

It's been a long time since I went through this, but I am pretty certain that when most of our department got laid off, we were advised to go ahead and start collecting unemployment from the date of layoff, even though we were getting severance packages equal to 2 weeks of pay for every year of service, up to 26 weeks. I'm really sure I collected both for 3 weeks until I got another job (like I said, it was a long time ago). This was in TX, by the way, in 1995.
posted by CathyG at 6:10 PM on October 18, 2011

This depends where you are, in Ontario, yes you absolutely have to declare it (and it is listed on the record of employment even if there was a confidentiality agreement) and your benefits don't begin until the severance is exhausted.
posted by saucysault at 6:37 PM on October 18, 2011

I think on my application I just had to certify that I wasn't receiving any pay. So even if severance counts, if you wait to apply until you can honestly say you're not getting it that pay period then you're not revealing anything about the severance, and it should be fine.
posted by Salamandrous at 7:17 AM on October 19, 2011