Severance Pay and Unemployment Compensation in New Jersey

By Thomas McKinney

An employee who is terminated and provided with severance pay from a company may also be entitled to unemployment compensation.  The qualification is that the severance pay cannot extend the employee’s employment.  For instance, an employee whose severance agreement provides that they will be kept on payroll for an additional time period is not entitled to unemployment compensation.  Companies may do this in order to keep the employee on the company’s health insurance plan.

Consequently, employees who would like to collect unemployment compensation and severance pay should request that the severance be paid in a lump sum.

February 25, 2010 – Tom McKinney – Castronovo & McKinney – Severance Attorneys

About the Author
Tom McKinney is an experienced NJ Employment Lawyer in all major areas of labor and employment law, including discrimination, harassment, overtime violations, wage and hour claims, sexual harassment, wrongful discharge, Title VII, ADA, ADEA, FMLA, LAD, FLSA, and all other employment law claims. Tom is admitted to practice in the States of New Jersey and New York, United States District Court for the Eastern District of New York, Southern District of New York, District of New Jersey, and United States Court of Appeals for the Third Circuit. Prior to forming the firm, Tom practiced at Gibbons P.C. in Newark, NJ. If you have any questions regarding this article, contact Tom here today.