Can You Get Unemployment if You Get Severance in Tennessee?
The Division of Employment Security within the Tennessee Department of Labor and Workforce Development operates the state's unemployment insurance fund. Eligible claimants receive between 13 to 26 weeks of of unemployment benefits plus federal extensions. The Tennessee Employment Security Law establishes the eligibility rules for claimants filing for unemployment insurance benefits. According to this law, if you receive severance pay, you may be able to simultaneously receive unemployment benefits.
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Monetary Eligibility
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When you initially apply for unemployment benefits, the Division of Employment Security checks your application to determine whether you meet its monetary eligibility rules. The division uses a 2001 Insurance Benefit Chart, and you are monetarily eligible if your wages during your two highest base quarters equal or exceed $780 at the time of publication. A base period of employment is the first four of the last five quarters of work before you filed your application.
Work Separation Eligibility
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If you are monetarily eligible, the Division of Employment Security verifies that you had valid work separation reasons for filing for unemployment. Generally, your employer must have terminated you for a lack of available work or you must have terminated employment for a valid reason. Valid reasons to terminate employment include discrimination or other illegal demands from your employer that violate state or federal laws. If the state approves your unemployment benefit application, you can receive between $30 and $256 weekly.
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Severance Pay and Unemployment Benefits
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The Division of Employment Security requires you to report any additional income that you earn while receiving benefits if deductible. Some types of other earnings are exempt, and you do not have to report them. Exempt and nondeductible income includes severance pay. If you receive severance pay, the state will not reduce your unemployment benefits. However, if you receive wages in lieu of notice, you must report the wages. Furthermore, wages in lieu of notice will reduce your weekly benefits or disqualify you from receiving unemployment benefits during the weeks that you receive wages in lieu of notice.
Wages in Lieu of Notice
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According to the Tennessee Employment Security Law, wages in lieu of notice is not severance. Severance pay is compensation based on your years of previous service. Tennessee law views wages in lieu of notice as payments for future service, and compensation for future service means that you are still working. To receive unemployment, you must actually be unemployed. Furthermore, if you received any type of compensation as an inducement to voluntarily terminate employment, you may not qualify for unemployment benefits.
Consequences
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If the Division of Employment Security denies your initial claim, you may reapply after you earn over 10 times your allowable weekly benefits or the amount that you would have received had the division approved your application. You may refile your claim after you earn additional income.
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