Labor and Economic Opportunity

Popular on michigan.gov

How Do I...

How Lump Sum and Salary Continuation Payments Affect Unemployment Benefits

How Lump Sum and Salary Continuation Payments Affect Unemployment Benefits

How Lump Sum and Salary Continuation Payments Affect Unemployment Benefits

How Lump Sum and Salary Continuation Payments Affect Unemployment Benefits

540583

If an employer makes a lump sum severance payment at the time the worker is separated from a job but allocates the severance payment to a week or weeks other than the week in which the payment is made, then the worker's weekly unemployment benefits will be reduced in each claimed week to which the severance payment is allocated.

If the employer makes a lump sum severance payment but does not allocate that severance payment to a week or weeks, then the severance payment will reduce the unemployment benefits only in the week in which the lump sum severance payment is made.

If the employer makes weekly or monthly payments of severance pay (sometimes referred to as salary or wage continuation payments), that severance payment will be used to reduce unemployment benefits in the week in which it is paid, unless the employer allocates the severance payments to other weeks.