I am seeking help in filing the unemployment claim for the State of CA. Do we have to list the 3 months salary (Separation Payment) in any of the category mentioned under the last employer information– "If you received, or if you expect to receive, any payments from your very last employer or any other employer other than your regular wages, report the payment below." Options are Holiday Pay, Vacation Pay, Severance Pay.
TIA!
It is not considered Severance. It is a lump sum payment equivalent to 3 months of your salary.
This bulletin was helpful for me in understanding this issue: https://www.edd.ca.gov/pdf_pub_ctr/de231a.pdf
It basically says that Severance payments and Vacation or holiday pay are NOT considered wages as far as determining UI benefits is concerned as long as:
• In the case of Vacation or holiday pay earned but not paid prior to the termination of employment (reportable as PIT wages).
I don't know how reliable source, but I've pasted what they have to say about it below (https://www.employmentlawfirms.com/resources/will-my-severance-prevent-me-collecting-unemployment.htm").
"In this regard, you are lucky to have worked in California. Under California law, severance pay is not considered wages for unemployment purposes. Instead, it is considered a payment in recognition of your past service. Even if it is paid out in installments, as yours will be, it doesn't count against your unemployment."
"To count as severance pay under California law, your severance must be paid out pursuant to an employer policy or plan. And, it must be available to a class or group of employees. Based on the facts you've given, it sounds like your severance could meet these criteria. (To learn more about these requirements, see Severance Pay, Dismissal, or Separation Pay, at the website of California's Employment Development Department.)"
I am in the same boat you are - based on my reading of this I will probably declare both vacation pay & severance pay......and hopefully this will not impact my eligibility for unemployment benefits.
Better you apply unemployment benefits by phone. They will help you on the phone.
https://www.edd.ca.gov/uibdg/Total_and_Partial_Unemployment_TPU_46035.htm
I'm in a different state and had a similar question on the application for unemployment. I answered 'No' because the separation payment isn't severance, it's not holiday pay, or vacation pay.