Can You Receive Unemployment Benefits After Taking a Voluntary Severence Package in Michigan?

Michigan residents can receive unemployment benefits once their severance packages run out.

When companies and public agencies see financial difficulties coming, they sometimes plan to make downsizing and layoffs as easy as they can for their employees. In some cases, before forcing layoffs, they offer voluntary severance packages -- allowing workers to receive larger parting wages by choosing to leave. However, in most cases the Michigan Department of Licensing and Regulatory Affairs still regards this as a form of layoff and allows workers to claim unemployment insurance once they have run out of severance payments.

Severance

A Michigan resident cannot receive unemployment payments at the same time as she receives her severance. Although she can claim unemployment immediately upon termination of her employment, a separated worker will not receive benefit payments during weeks when her former employer pays her. When an employer gives a lump-sum severance payment, a claimant's benefits are impacted for only one week. However, if payments continue over a series of weeks or months, unemployment will be delayed accordingly.

Quitting

Michigan does not give unemployment benefits to those who terminate their employment without just cause. For example, a person who decides she doesn't like her job anymore can't simply quit and collect unemployment benefits. However, someone who feels harassed at work may have just cause to quit if she has tried to remedy the situation and the problem persists. Accepting a severance package is acceptable to Michigan in part because companies give them as a way to soften inevitable layoffs -- workers aren't quitting without cause.

Qualifications

Claimants must meet several conditions to receive unemployment benefits. They must actively search for work and have no other earnings. Michigan unemployment is designed to assist state residents facing tough times between jobs. Therefore, beneficiaries cannot use their unemployed time to take a break from working or engage in personal endeavors. Additionally, claimants must have worked for employers who made unemployment contributions on their behalf through payroll taxes for typically about one year before separation.

Investigations

Occasionally, Michigan unemployment caseworkers flag voluntary layoff cases for investigation. Unemployment officials may want to verify that a claimant was affected by layoffs and did not quit without cause. This often includes checking with both a claimant and her former employer.

References

• Michigan Department of Licensing and Regulatory Affairs: Claiming Unemployment Benefits in Michigan
• Michigan Department of Licensing and Regulatory Affairs: Voluntarily Leaving (Quit)
• Michigan Department of Licensing and Regulatory Affairs: The Effect of Severance Pay on Unemployment Benefits
• CUPA HR: Staff and Union Voluntary Severance Program FAQ