Will back pay from wrongful termination affect my EDD benefits? Help!

Yes, you'll need to report the settlement when you receive it. EDD will likely consider a portion of it as wages for the period it covers. Since it represents 6 weeks of salary, they may reduce or eliminate your benefits for those specific weeks. You probably won't have to pay back everything, just for the weeks the settlement covers. Be sure to keep all documentation showing what period the settlement covers and submit that info when you report it.

when i got backpay from my job last year i just reported it on the week i got paid and edd took it all out of that weeks payment. didnt affect any other weeks. but mine was only for like 2 weeks of pay so maybe its different for bigger amounts?

This is a bit complicated because it depends on how the settlement is structured. If it's specifically categorized as "wages" for specific weeks, EDD will treat it as income for those weeks. However, if part of it is for emotional distress or other non-wage compensation, that portion might not affect your benefits. You need to report the entire amount when you receive it during certification, but also call EDD to explain the situation and provide documentation about the settlement breakdown. This way they can properly allocate it. I had trouble getting through to a specialist about a similar issue last year. After days of busy signals, I finally used a service called Claimyr (claimyr.com) that got me connected to an EDD rep within 20 minutes. They have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km. It was worth it to get a clear answer directly from EDD rather than guessing.

WRONG INFORMATION ABOVE!! Settlement money is NOT reported the same as regular wages! EDD has specific rules about legal settlements! If you report it wrong they'll freeze your entire claim while they investigate!! When I got my settlement last year, I had to report it as a lump sum payment with special circumstances. You HAVE TO call them to get guidance on your specific situation because settlement agreements are all different. Some portions might not count against your UI at all. DO NOT just report it as wages on your certification without talking to them first!!

hey i went thru this exact situation in 2025 got wrongfully terminated in january and got a settlement in march while on unemployment. what happened was my settlement had different parts - backpay, severance, and something about emotional distress. only the backpay part counted as "wages" for unemployment. i had to submit the settlement agreement letter to edd so they could see how it was broken down. they reduced my benifits for the specific weeks the backpay covered but not for the other money. def call them and ask but you'll need your settlement paperwork to show them the breakdown.

To answer your earlier question - yes, if the settlement covers weeks you already received benefits for, you'll likely get an overpayment notice. But if you're proactive and call them BEFORE you receive the settlement, they can sometimes adjust things to make it easier. They might be able to reduce future payments instead of asking for money back all at once.

my cousin had this happen and she had to pay back unemployment for the weeks the settlement covered but she didnt lose her whole claim or anything just that money. not sure if thats how it allways works tho

I want to clarify something important: When you get your settlement, you'll need documentation showing exactly how it's allocated. Make sure your lawyer provides a breakdown letter that clearly shows what portion is for back wages versus other damages. When you certify for the week you receive the payment, answer "Yes" to the question about receiving income, and select "Other" as the type of income. In the details section, explain it's a legal settlement. Then immediately contact EDD with your documentation. The key is being transparent and proactive. As long as you report it properly and provide documentation, you should avoid penalties even if there's an overpayment that needs to be addressed.

One thing I haven't seen mentioned yet - make sure you keep detailed records of everything! Save copies of your settlement agreement, any correspondence with EDD about it, and document all phone calls (date, time, rep name if possible). If there are any issues later, having a paper trail will help resolve them much faster. I learned this the hard way when EDD mixed up my case details and I had to prove what was actually discussed in previous calls. Also, don't stress too much about this - wrongful termination settlements are pretty common and EDD deals with them regularly. As long as you're upfront about it and provide the proper documentation, they'll work with you to sort it out correctly.