Will Discrimination & Retaliation settlement affect unemployment benefits?

[BognerCA]

What is the name of your state (only U.S. law)? CA

I was terminated in February and filed charges with the DFEH for discrimination and retaliation. I've agreed to a settlement with my ex-employer that will be paid in a lump sum while I'm still collecting unemployment.

Do I need to report the settlement to EDD the week received? If so, do I report it as severance or not considered a severance since it's a settlement for discrimination and retaliation charges? I have not filed a lawsuit and the settlement will include release of all claims. I have asked my lawyer and he doesn't have a clue.

Thanks

 

[LdiJ]

What is the name of your state (only U.S. law)? CA

I was terminated in February and filed charges with the DFEH for discrimination and retaliation. I've agreed to a settlement with my ex-employer that will be paid in a lump sum while I'm still collecting unemployment.

Do I need to report the settlement to EDD the week received? If so, do I report it as severance or not considered a severance since it's a settlement for discrimination and retaliation charges? I have not filed a lawsuit and the settlement will include release of all claims. I have asked my lawyer and he doesn't have a clue.

Thanks

I am surprised that your attorney doesn't have an answer. However, I believe that its all going to depend on how the settlement is worded. If any of it is earmarked as back wages, then I am going to be guessing that it needs to be reported.

 

[commentator]

You will need to report it, immediately if not sooner, to the unemployment system and let them direct you. They will need to know immediately, the week this whole settlement is decided, when you find out exactly what you are going to get, and exactly how it is worded in the agreement.

If it is considered backpay, wages, you will probably be considered to have been overpaid any and all of the unemployment benefits you have received, and you will be required to pay it back, though not with sanctions or interest since it was certainly through no fault of your own that you were overpaid. But there's no way anyone can guide you through this except the unemployment system, no matter what your attorney thinks will happen (they were wise not to venture a guess). A decision about this moneywill have to be made by the system, and what they say will be the final word on how you are to deal with this payment.

 

[BognerCA]

You will need to report it, immediately if not sooner, to the unemployment system and let them direct you. They will need to know immediately, the week this whole settlement is decided, when you find out exactly what you are going to get, and exactly how it is worded in the agreement.

If it is considered backpay, wages, you will probably be considered to have been overpaid any and all of the unemployment benefits you have received, and you will be required to pay it back, though not with sanctions or interest since it was certainly through no fault of your own that you were overpaid. But there's no way anyone can guide you through this except the unemployment system, no matter what your attorney thinks will happen (they were wise not to venture a guess). A decision about this moneywill have to be made by the system, and what they say will be the final word on how you are to deal with this payment.

If the settlement agreement is not yet signed, do I have to report it right away or can I wait until the agreement is signed? What is considered backpay to unemployment?

 

[BognerCA]

I am surprised that your attorney doesn't have an answer. However, I believe that its all going to depend on how the settlement is worded. If any of it is earmarked as back wages, then I am going to be guessing that it needs to be reported.

My attorney said he doesn't deal with how settlements are taxed or how they are handled by unemployment. We're in the process of allocating what the settlement is for based on the claims and wording the settlement right now. What exactly are "back wages" -- I am not being reinstated/getting my job back and the settlement is less than my total lost wages so far.

 

[commentator]

In unemployment law, there is a difference between severance and wages in lieu of notice and other types of payments made by the employer to the employee. I cannot recommend that you ask for one over the other, but the fact will be that you will be receiving some sort of payment by the employer to you. And only the unemployment system is able to render a decision about how whatever type of payment it is will affect the claim.

You should probably give them a heads up about it right away, as soon as possible, the minute the agreement is signed, start trying to discuss this with the unemployment office, you know it's sometimes tough to reach someone on the phone system, and you will need to bring this up with a real human being, it's not a simple on line deal. Keep careful records of who you've spoken with, when you've spoken to them, and exactly what you were told by each U.I. representative you have talked with.

This will not be a matter of simply reporting wages of say for example $12,000 on one of your weekly certifications. This will be something they'll need to be working on as soon as it is signed and settled while you continue you make the weekly certifications without pay. They will have to see a copy of the award letter and render a decision.

As soon as you report this and bring it up, your claim will be stopped until a decision is reached, though you will be instructed to continue making weekly or bi-weekly certifications for benefits and the required job search activities. It is possible it will have no effect whatever on your claim and in that case, you'll be back paid for any weeks you've certified for before the decision was reached. If you are determined to be overpaid, you won't be any more overpaid than you were at the time of the decision because you've notified them and your claim has stopped at that point.

The only way you'd get into trouble is if you simply don't notify them at all. Even if you completely stop drawing a claim, never certify for another week, they'll find out anyway, and you'll potentially overpaid what you've already drawn with possible fraud penalties.

 

[BognerCA]

In unemployment law, there is a difference between severance and wages in lieu of notice and other types of payments made by the employer to the employee. I cannot recommend that you ask for one over the other, but the fact will be that you will be receiving some sort of payment by the employer to you. And only the unemployment system is able to render a decision about how whatever type of payment it is will affect the claim.

You should probably give them a heads up about it right away, as soon as possible, the minute the agreement is signed, start trying to discuss this with the unemployment office, you know it's sometimes tough to reach someone on the phone system, and you will need to bring this up with a real human being, it's not a simple on line deal. Keep careful records of who you've spoken with, when you've spoken to them, and exactly what you were told by each U.I. representative you have talked with.

This will not be a matter of simply reporting wages of say for example $12,000 on one of your weekly certifications. This will be something they'll need to be working on as soon as it is signed and settled while you continue you make the weekly certifications without pay. They will have to see a copy of the award letter and render a decision.

As soon as you report this and bring it up, your claim will be stopped until a decision is reached, though you will be instructed to continue making weekly or bi-weekly certifications for benefits and the required job search activities. It is possible it will have no effect whatever on your claim and in that case, you'll be back paid for any weeks you've certified for before the decision was reached. If you are determined to be overpaid, you won't be any more overpaid than you were at the time of the decision because you've notified them and your claim has stopped at that point.

The only way you'd get into trouble is if you simply don't notify them at all. Even if you completely stop drawing a claim, never certify for another week, they'll find out anyway, and you'll potentially overpaid what you've already drawn with possible fraud penalties.

Ok, I'll call them asap once it's signed because until it is, it's not official (I imagine it could still fall apart if we can't agree on the details) for anyone to even evaluate how it would/could impact my unemployment.

 

[commentator]

This is not helpful. Even the people who work for the unemployment system will have to figure out whether or not this is includable income and they are the ONLY people it will be appropriate for this person to ask. And while I also "do not think" it would affect the benefits, our opinions about something that happened here a while back are not helpful and shouldn't be posted

 

[HRZ]

Wording and details matter and differ by state, might be smart to address wording BEFORE it gets into final signed format .....if it matters . .

THe CA EDD posts
"How does severance pay affect my eligibility to receive unemployment insurance benefits?
Severance pay is not deducted from unemployment insurance benefits and does not affect your eligibility to receive benefits. The method of payment, such as a lump sum payment or payments paid to you at regular pay period intervals does not change the nature of the payment. However, you must report severance pay at the time you file your unemployment insurance claim."

 

[commentator]

This is not helpful. Even the people who work for the unemployment system will have to figure out whether or not this is includable income and they are the ONLY people it will be appropriate for this person to ask. And while I also "do not think" it would affect the benefits, our opinions about something that happened here a while back are not helpful and shouldn't be posted

Repeat. Lather rinse repeat.