Severance package in 2025 and EDD benefits - when to apply with company closure?

You should apply for unemployment immediately after your last day of work (March 13). Don't wait until your severance runs out! Severance pay doesn't automatically disqualify you from benefits, but it can affect how much you receive during those weeks. The EDD treats severance differently depending on how it's paid out. If you're getting a lump sum payment, you need to report it for the week you receive it. If it's being paid out over time like yours (8 weeks), you'll need to report those payments for each week you certify while receiving severance. When you certify, you'll report the severance as "other income" and EDD will reduce your weekly benefit amount accordingly. Once your severance ends, you'll get your full benefit amount if you're still unemployed.

same thing happened at my job last year got 6wks severance... just telling u DO NOT WAIT to file! took them like 3 weeks to even process my claim then another 2 weeks b4 i got any $$. file the DAY after ur last day!!!

Here's what you need to know about severance and unemployment in California: 1. Apply immediately after your last day worked. The claim is effective the Sunday of the week you apply, so any delay means lost benefits. 2. When certifying, report your severance payments as "other income" for each week you receive them. 3. EDD uses a formula: if your severance for a week exceeds your weekly benefit amount, you'll get $0 for that week, but you'll still be certifying and keeping your claim active. 4. Your benefit year is still 12 months regardless of severance. 5. For part-time work, you can still qualify for partial benefits if you earn less than your weekly benefit amount (though they'll deduct a portion of your earnings). The big advantage of filing right away: once your severance ends, you're already in the system and getting full benefits without delay.

To answer your question - those $0 weeks DO count against your benefit year (which is 12 months from filing), but they DON'T count against your maximum benefit amount. You'll still be eligible for your full benefit allocation once your severance ends. And regarding your part-time work question: if you find part-time work, you must report those earnings when certifying. You can earn up to $149 with no reduction in benefits. After that, EDD subtracts 75% of your earnings from your weekly benefit amount.

The EDD system is a complete disaster and you're probably going to have trouble reaching anyone by phone when you have questions. The first time I tried filing after getting laid off, I spent THREE DAYS trying to get through to an actual person. Kept getting disconnected or that stupid "we're experiencing high call volume" message. Finally I found out about this service called Claimyr (claimyr.com) that helps you skip the phone queue. They have this system that calls EDD for you and then connects you once they get through. Check out their demo: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km Was a lifesaver for me because I had questions about my severance too that weren't answered on the website. Just giving you a heads up because you WILL have questions during this process that only a live person can answer.

DONT LISTEN TO PPL SAYING REPORT SEVERANCE AS "OTHER INCOME"!!!! My HR specifically told us our severance was NOT reportable to EDD because it was considered a "loss of employment payment" not wages!!! Different companies structure severance differently and it MATTERS. Some are WAGES and some are DAMAGES. Ask your HR specifically how your severance is classified!!!!

this happened to me last year and the EDD website was really confusing when i tried to file. make sure you have your last paystub and all the layoff paperwork ready when you apply. and yeah file right after your last day worked. they ask for the exact date your employment ended.

i dont remember them asking about severance during the initial application but when you certify every 2 weeks they ask if you received other income. thats where you report it. make sure to save all ur severance paperwork in case they audit you later. my friend got hit with an overpayment notice 6 months later because she messed up reporting her severance.

anybody else notice edd always process claims faster when its a company closing and lots of people filing at once? when i got laid off before covid it took 6 weeks to get approved but when our whole office closed last year i got benifts in like 10 days

Thanks everyone for all this helpful information! I'm going to talk to HR tomorrow to get more specific details about how our severance is classified and get the documentation ready. I'll definitely file right after my last day in March rather than waiting. Good to know about the potential delays - I'll make sure I have some savings to cover the gap. I appreciate all the insights!

One more thing to add - make sure you document EVERYTHING during this process! Keep copies of your layoff notice, severance agreement, and any communications with HR about the company closure. If EDD has questions later, having all this paperwork organized will save you tons of headaches. Also, since your whole office is closing, you might want to coordinate with your coworkers about the application process. Sometimes when multiple people from the same company file around the same time, it can actually help speed things up since EDD already has the employer information in their system from the previous claims. And don't stress too much about the timing - you're doing the right thing by researching this ahead of time. Most people don't even think about unemployment until after they're already out of work. You'll be in much better shape having a plan!

Something else to consider - since you mentioned potentially getting a part-time job during the transition, make sure you understand the work search requirements. When you're receiving partial unemployment benefits (while working part-time), you still need to be actively searching for full-time work and documenting those job search activities. EDD requires you to make a certain number of work search contacts each week, and they can audit this later. Keep a detailed log of every application, interview, and networking contact you make. This requirement continues even while you're getting severance payments and receiving $0 in benefits - you still need to be "able and available" for full-time work to maintain your claim.

Just went through this exact situation when my company downsized last fall! One thing that really helped me was creating a simple spreadsheet to track everything - severance payments received each week, my weekly certifications, and work search activities all in one place. Made it so much easier when I had to reference dates later. Also wanted to mention that if your company is providing any job placement services or career counseling as part of the closure, definitely take advantage of those! They often count toward your work search requirements, and some companies will even provide letters confirming your participation that you can use as documentation for EDD. The transition period is stressful but you're asking all the right questions. Having that severance cushion while you get the unemployment process started is actually a pretty good situation compared to just getting cut off immediately. You've got this!

One more tip that saved me during my layoff - consider setting up direct deposit for your EDD benefits BEFORE you actually start receiving them. You can do this in your UI Online account once your claim is approved. It takes a few business days to set up, and if you wait until you're actually getting benefits, there can be delays in receiving your first payment. The EDD debit card they send as the default option works fine, but direct deposit is usually faster and more reliable. Also, make sure your address is 100% correct in the system - I've heard horror stories about people not getting their debit cards because of address issues, especially during moves or transitions like company closures.

I'm going through a similar situation right now - my company just announced they're closing our division in April and I've been researching all this too. One thing I wanted to add that I learned from talking to someone at the local American Job Center is that California has a "shared work" program that some companies use instead of layoffs, but since your whole office is closing that obviously doesn't apply here. What I found really helpful was calling the EDD customer service line during off-peak hours (early morning or late afternoon) to ask specific questions about my situation before filing. I know everyone says it's impossible to get through, but I actually got connected after about 45 minutes on a Tuesday at 7:30 AM. The representative was able to walk me through exactly how my severance would be treated and gave me the specific income codes I'd need to use when certifying. Also, make sure you keep your final pay stub that shows your last day worked - they specifically ask for this date during the application process and it has to match exactly. Good luck with everything, and don't let the process intimidate you. It's actually more straightforward than it seems once you get started!

I went through a similar company closure situation about 18 months ago and wanted to share a few things that really helped me navigate the process. First, definitely file your claim immediately after your last day - don't wait! The severance won't disqualify you, but you'll need to report it when you certify every two weeks. One thing that caught me off guard was that EDD sometimes requires additional documentation for company closures, especially if it's a larger business. They may ask for a copy of your WARN notice (if your company was required to provide one) or other layoff documentation. Having all your paperwork organized from day one will save you headaches later. Also, since you mentioned stress about income gaps - consider that even if your severance reduces your weekly benefits to $0 for those 8 weeks, you're still building time in the system. Once your severance ends, you'll immediately start receiving your full weekly benefit amount without having to wait for processing delays. The part-time work question is tricky - you can work and still collect partial benefits, but make sure you understand the earnings limits and reporting requirements. Every dollar counts during a transition like this, so it's worth exploring if you find the right opportunity. Hang in there - company closures are tough, but at least you have some advance notice and severance to help with the transition!