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Landon Flounder

Can I get unemployment if I get a severance package? California EDD question

Got laid off from my logistics coordinator job last Friday after 6 years and my company is offering me a severance package - 8 weeks of pay as a lump sum. HR basically handed me the paperwork the same day and said I could sign or think about it. I'm planning to sign because we need the money, but now I'm panicking about whether taking the severance means I can't file for unemployment with California EDD. I tried searching online and I'm getting completely different answers depending on where I look. Some sites say severance disqualifies you, some say it doesn't matter at all. I'm 44 with two kids and my wife's job doesn't cover everything so I really need to know the real answer here. Can I get unemployment if I get a severance package or does accepting it cut me off? Do I file first and then report the severance? Do I wait until the 8 weeks run out before applying? Really stressed out about getting this wrong.

Filed for California EDD unemployment two months ago after a layoff with a 6-week lump sum severance, so I can speak to this directly. The short answer is yes, you can file - the severance package does not automatically disqualify you from unemployment. EDD actually has specific guidance that says severance paid under a company plan or policy isn't counted the same way as regular wages, so it won't block you from getting benefits. The important thing is you don't wait for the 8 weeks to run out before filing. Apply now, while your last day of work is still recent, because your claim week starts from the Sunday of the week you apply and you can't go back and claim earlier weeks. Report the severance when you certify - EDD will figure out how it affects your specific payment. I reported mine as a lump sum and my payments came through for the weeks I certified.

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This is exactly what I needed to hear. So I should just go to myEDD at https://myedd.edd.ca.gov/ and start the application now, not wait? And when I certify every two weeks I just list the severance somewhere in there?

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Yes, apply right away through UI Online. When you certify, there's a question about income for each week - you report it there, in the week the money was for or the week you received it (the certification will walk you through it). Don't overthink it, just answer the questions honestly and EDD makes the call on how the numbers work out.

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Jumped in here because I had the same question before I filed last year. Applied the week I got my layoff notice and my claim went through without any issue even with a severance agreement. Definitely don't wait.

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Eight weeks of severance after six years at one company honestly sounds like a decent package - but yeah file immediately regardless. I work in HR and I've seen so many people delay their EDD application thinking they had to wait until severance ran out and then they lost weeks of benefits they could have had. EDD's rules are pretty clear that severance paid as part of a company plan doesn't block UI benefits the way wages from actually working would. You'll still have your one-week unpaid waiting period when you first certify, but after that you should start seeing payments come in. Make sure you have all your employer info ready when you apply - last day worked, company address, your earnings from the last 18 months or so.

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Wait - what's the one-week waiting period about? Does that mean my first payment is delayed by a week no matter what?

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Every California EDD claim has that one unpaid waiting week built in - it's just the first week of your claim and it doesn't pay out. Usually your first time certifying covers that waiting week plus one actual paid week, so you get one payment for those first two weeks instead of two. After that it's normal every two weeks.

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the waiting week thing tripped me up too when I first filed, thought my claim was messed up when I only got paid for one week the first time around

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Twelve weeks into my own layoff claim and I ran into something frustrating trying to get EDD on the phone about a wage reporting question. Spent most of a morning getting nowhere. Ended up using Claimyr (claimyr.com) - it holds your place in the EDD phone queue while you get on with your day, and you pick up when it's your turn with a live agent. There's a short video about reaching a live person at EDD that way at https://youtu.be/JmuwXR7HA10. The agent I spoke with looked up my claim and confirmed that my lump sum severance had been received and noted on my file, and that my pending week would clear once my next certification processed. Really helpful to get that specific answer about my own account instead of just guessing.

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That phone queue thing sounds really useful, I've already been dreading having to call EDD if something goes wrong with my claim. Did you have to wait long once it was your turn?

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The agent was ready to talk through my account details and answer the specific question I had about my pending week. Definitely better than getting disconnected after an hour on hold.

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My certification had a wage reporting issue on a week I'd already submitted and I needed to reach EDD about it too. Used Claimyr for that call - the agent pulled up my account and walked me through what to do, which was basically to send a message through UI Online to flag the week in question.

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good to know there's actually a way to get through, EDD phone lines have been impossible in my experience

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One thing that confused me when I first got laid off with severance was whether I had to report the payment as wages when I certified. My brother told me to just not mention it and I'm really glad I didn't follow that advice. EDD lists severance as something you're supposed to report when you certify - it's right there on the certification questions. The good news from what I read on EDD's site is that severance under a company plan isn't treated the same as actually earning wages, so it typically doesn't reduce your weekly benefit the way part-time work would. But you still report it and let EDD make the call. Never hide income when you certify, that can turn into an overpayment situation fast.

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Yeah I would never try to hide it, I'm already stressed enough about this. So report everything and let EDD sort it out - got it. Do I report it as one lump sum or spread across the 8 weeks?

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My understanding is you report it in the certification for the period you received it, but the certification questions themselves will guide you. If you're unsure, ask EDD directly - message them through UI Online or call. Don't just guess on that.

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I reported mine as a lump sum in the week I actually received the check and EDD processed it fine. But what the person above said is right - if you're uncertain, ask EDD for your specific situation rather than following what someone else did.

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OP be careful about one thing - make sure you register in CalJOBS and get your resume posted there within 21 days of getting the notice from EDD asking you to do it. They send a letter (the DE 8405) telling you to register and if you miss that window your payments can get held up. I totally missed that my first week because I assumed EDD was just about certifying and nobody told me about the CalJOBS requirement until I noticed my payment was pending. Had to scramble to get it done.

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Oh I had no idea about CalJOBS at all. So I need to create an account there AND post a resume? Is that at caljobs.ca.gov?

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Yes, caljobs.ca.gov is the site. EDD will tell you in the letter whether you need to do it - not everyone is required - but most people are. Set up your profile and upload a resume as soon as you get that DE 8405 notice, don't wait until day 20.

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CalJOBS also has job listings and workshop stuff if you want to use it beyond just the registration requirement, but yeah the main thing to do right away is get the account set up and resume in there

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Honestly I was in this exact spot eight months ago - logistics company, layoff, severance offer on the table - and I agonized over whether to sign the severance agreement first or file for unemployment first. My coworker who got laid off the same day told me I had to wait until the severance period was completely over before I could collect UI and I almost believed him. That is not how it works. Filed the same week I signed the severance paperwork. Got my DE 429Z notice in the mail showing my weekly benefit amount, completed my CalJOBS registration, and started certifying every two weeks. Benefits have been coming in consistently. Your coworker or HR rep might not know the actual EDD rules so double-check everything.

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Your coworker giving you wrong info is exactly the situation I'm in trying to google this - everybody seems to have a different version of the rules. Good to hear it worked out without waiting.

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The confusion is super common. Even some HR people tell laid-off employees to wait on filing which isn't accurate. File now, report honestly, let EDD do its thing.

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Former coworker told me the same wrong thing about waiting when I got my severance. Applied right away anyway and it was fine. The misinformation about severance and unemployment is everywhere.

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Something I want to flag for OP - the weekly benefit amount won't include your severance in the calculation of what you receive per week. Your weekly benefit comes from your past wages in what EDD calls the base period (roughly the first four of the last five completed calendar quarters before you applied). So those 8 weeks of severance pay don't boost your weekly benefit amount. The DE 429Z letter will show you what your weekly amount works out to once EDD processes your claim. If anything on that letter looks wrong - like your wages seem off - you can appeal it in writing within 30 days.

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So my weekly benefit is based on what I was earning at my actual job, not on the severance amount? And it goes up to $450 max in California?

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Exactly - it comes from your wages during your base period, not the severance. And yes, California's maximum is $450 per week right now. The DE 429Z will show your specific amount. EDD also has a calculator on their site where you can get an estimate before the letter arrives.

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$450 max feels really low for California cost of living but that's what it is, yeah. At least it's something coming in while you job search.

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EDD TAKES FOREVER to process new claims and nobody tells you that upfront. Applied after my layoff in the spring and it was almost three weeks before I saw any payment at all. If you have savings or the severance to float you for a bit that helps because even when everything is going right the first check takes a while. Just want OP to know so they don't panic if weeks one and two go by with nothing showing yet.

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Three weeks is kind of terrifying but good to know going in. Does certifying start before or after EDD processes the initial application?

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You certify starting about two weeks after EDD processes the application. So yeah you're looking at a few weeks before anything comes in. Apply NOW so the clock starts.

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my first payment took about 23 days from when i filed and i had no issues with my claim, it's just how long processing takes

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Something people skip over - EDD notifies your last employer when you file a claim. Your company will get a form asking about your separation. Since you were laid off rather than quitting or being fired for cause, the employer response should straightforwardly confirm it was a layoff and that typically doesn't create any adjudication hold on your claim. Just so you know that step exists and that your former employer is in the loop. If your company tries to contest the claim for some reason you'd get notified and go through a phone interview with EDD.

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Should I let my HR contact know I'm filing for unemployment? Or does that seem weird after a layoff?

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You don't have to tell them separately - EDD sends them the notice automatically. For a straightforward layoff there's usually nothing your HR needs to do other than respond to EDD confirming the separation details. It's standard, they've seen it before.

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My HR actually told me they'd respond to EDD confirming the layoff details when I mentioned I was filing. Some companies are pretty used to the process, especially if they just did a bigger round of cuts.

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Just got to week 18 on my UI claim and I want to add one practical tip - download or screenshot your payment history from UI Online every few weeks. If a payment ever shows as pending or something weird happens with a week, having that record is helpful when you contact EDD to sort it out. I had a week show as pending for two weeks after I'd already certified and being able to tell EDD the exact week number and amount made the conversation much cleaner.

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That's smart. So the Claim History section in UI Online shows each week and the status?

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Yes - Claim History in UI Online lists your certified weeks and their payment status. Keep an eye on it after each certification. If a week sits as Pending for longer than a couple weeks with no explanation, that's usually when you want to reach out to EDD to find out if something needs to be resolved.

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The Claim History screen saved me when I was trying to explain to EDD which weeks were affected by my wage reporting question. Having the specific dates and amounts ready made the call go way faster.

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my company did the same thing when they laid me off, lump sum severance same day as the notice, didn't even get a heads up it was coming. HR told me I couldn't file until the severance 'period' was over and I genuinely believed them for about two weeks before I found out that wasn't right. Filed late and lost those first two weeks I could have been collecting. don't make that mistake, file the same week you get the layoff notice

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Ugh that's frustrating that you lost those weeks because of bad info from HR. I'm definitely filing this week now.

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yeah it stings but just apply right away and don't overthink it

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One misunderstanding I see on these threads all the time - people think getting a severance means their employer is trying to take away their unemployment rights, like there's something in the severance agreement that blocks EDD. Unless your severance agreement specifically has some kind of really unusual clause that an employment attorney said was problematic, signing a standard severance package doesn't sign away your right to file for unemployment. EDD's rules are set by the state, not by what your employer puts in a separation document.

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I did skim the severance paperwork and it's basically just a standard release of claims form plus the payment schedule. Nothing jumped out about unemployment specifically.

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That's normal. Standard release of claims covers employment-related lawsuits, not state unemployment benefits. File away.

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Worth having an employment attorney glance at it if anything seems off, but for a typical company layoff severance package this is accurate - EDD eligibility is determined by EDD, not by what your former employer writes in a separation agreement.

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Applied for California EDD the Monday after my layoff and had my severance agreement signed the same day. The thing that slowed my claim down was identity verification - I had to go through ID.me to verify before EDD could process anything. If you haven't done that already, do it right away when you apply. Some people get a letter asking them to verify (the DE 1326C) and if you sit on it your payments get held up waiting on identity confirmation.

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ID.me is the one where you take a photo of your ID and a selfie? I've used it for other stuff before so hopefully my account is already set up.

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Exactly - if you already have an ID.me account connected to your EDD application from a previous claim that might speed things up. If not, you create the account, verify your identity with the photo process, and allow ID.me to share the verification with EDD. Do it right at the start so it doesn't become a bottleneck.

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ID.me tripped me up my first time filing because I tried to do it on my phone and the photo kept failing. Ended up using a laptop with a decent webcam and it worked on the first try. Worth knowing if the mobile process gives you trouble.

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Can I ask a related question since I'm in a similar boat? My severance was paid partly as a lump sum and partly spread over 12 weeks as continuation pay through my company's payroll. HR said the second part is technically still on the company payroll through the salary continuation period. Does that change anything about when I can file or what I report on the certifications?

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The salary continuation piece is something to ask EDD about specifically for your situation - how EDD treats it may be different from a true lump sum severance. Report all of it honestly when you certify and let EDD determine the effect on your specific weeks. If you want a clear answer before you file, reaching an EDD agent would be the fastest way to get it for your exact setup.

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The rule of thumb is report everything and let EDD sort the specifics. What you describe with partial salary continuation through payroll sounds like it might be treated differently than a standard severance payout but that's EDD's call, not something anyone here can answer definitively for you.

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Okay, that's helpful - I'll report all of it and ask EDD if there's a pending issue. At least I know to file now rather than wait.

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DE 429Z came in the mail about 12 days after I filed and my weekly amount was lower than I expected because my highest earning quarter was two years ago before I took a lower-paying contract role. If your income has gone up recently, your weekly benefit might be lower than you'd expect based on what you were making at your layoff job, because EDD looks back at the base period quarters and uses your highest one from that window, which might be from a while back. Worth knowing before you assume the weekly amount will reflect your current salary.

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Oh that's a really good point - I had a year a few years back where I was making more than I am now. So in theory my weekly amount could actually be based on that higher earning period?

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If that higher-earning quarter falls within your base period window, yes - EDD takes the highest quarter to calculate your weekly benefit amount. Worth estimating it on EDD's calculator before the DE 429Z arrives so you're not surprised.

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EDD's benefit calculator is on edd.ca.gov and gives a pretty close estimate once you plug in your quarterly wages. Useful to run the numbers now so you can plan around what's coming.

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The work search requirement is real and EDD takes it seriously even though a lot of people treat it as optional during the first few weeks. You have to be actively looking for work and able and available every week you certify. Keep track of where you're applying - you don't need to log it anywhere official with EDD, but if they ever ask you need to show you were looking. Some people think severance somehow pauses the work search requirement but it doesn't.

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i kind of assumed the work search stuff was just paperwork but apparently EDD does random audits where they ask for documentation

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Exactly why keeping your own notes or spreadsheet of applications is a good habit, even though EDD doesn't require you to submit it every week. Just have something if they ever ask.

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The certification questions ask if you looked for work each week - you answer yes or no honestly. If EDD wants more detail they'll follow up, but for most people just certifying that you're actively searching is how it works week to week.

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Unemployment benefits are federal taxable income even though California doesn't tax them at the state level. When you first certify you can opt to have 10% withheld for federal taxes. I didn't do it my first claim thinking I'd just deal with it at tax time and ended up with a surprise bill in April. Something to decide upfront.

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10% federal withholding - is that something I choose when I first certify, or on the initial application?

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You choose it when you certify - there's a question about federal tax withholding each time and you can change your answer. EDD will also send a 1099G in January for whatever you received during the year, and it's available in UI Online under the Payments section.

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got hit by that tax bill too my first time, definitely elect the withholding from the start if you can afford the slightly smaller weekly payments

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Coming up on week 22 of my claim after a layoff with severance last winter and want to close the loop for anyone reading this thread later. Filed the same week I signed the severance agreement, reported the lump sum payment when I certified, and my benefits came through without any adjudication hold or delay. The severance genuinely was not an obstacle. Used Claimyr to reach EDD mid-claim when my UI Online showed a pending week I couldn't explain - got through to an agent who confirmed it was a certification timing issue, nothing wrong with my claim. Fully resolved the following week.

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Really appreciate you sharing the full arc of it - 22 weeks and no major issues even with the severance. That's reassuring.

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The honest summary is file right away, report everything, register in CalJOBS when EDD tells you to, and certify consistently every two weeks. The severance question is way less complicated than the internet makes it seem.

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Good outcome. The severance-and-unemployment question trips up so many people but the actual answer is pretty simple once you get past all the bad info floating around.

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