Can I claim unemployment benefit after a settlement agreement with my employer?
I just signed a settlement agreement with my former employer last week after they terminated me. The settlement included a severance payment of about $8,000 and a non-disclosure clause. I'm wondering if I can still file for unemployment benefits through NYS Department of Labor or if the settlement disqualifies me somehow? The termination wasn't my fault - they said it was due to restructuring but I think there were other issues involved. Has anyone dealt with this situation before? I really need the unemployment income while I look for a new job.
23 comments


Miguel Hernández
You can definitely file for unemployment benefits after a settlement agreement. The NYS Department of Labor will look at the actual reason for your termination, not whether you received a settlement. The key factors are whether you were terminated through no fault of your own and if you're able and available for work. The severance payment might affect the timing of when you can start collecting benefits though - you'll need to report it when you file your initial claim.
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KylieRose
•Thanks! Do I need to report the exact settlement amount or just that I received severance? I'm worried they'll think I don't need the benefits.
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Sasha Ivanov
same thing happened to me two years ago, got a settlement from my company and still qualified for UI benefits
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Liam Murphy
Be very careful about what you tell NYS Department of Labor about the settlement terms. If there's anything in that agreement about you voluntarily leaving or resigning, that could cause problems with your claim. The adjudication process will review all the circumstances. I'd suggest being completely honest about the termination being involuntary due to restructuring. You might want to have copies of any documentation that shows it was their decision, not yours.
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KylieRose
•The settlement agreement does say 'involuntary termination due to business restructuring' so I think I'm okay there. Should I bring a copy when I file or just mention it?
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Amara Okafor
I had issues trying to reach NYS Department of Labor when I had questions about my settlement situation. Kept getting busy signals and when I did get through, I'd get hung up on after waiting forever. Finally used this service called Claimyr (claimyr.com) that actually got me connected to a real person at unemployment. There's even a video demo showing how it works: https://youtu.be/qyftW-mnTNI. Made the whole process so much easier than trying to call myself.
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CaptainAwesome
•Interesting, never heard of that service before. Did they charge you a lot for it?
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Amara Okafor
•It was worth it just to avoid the frustration of trying to get through on my own. They focus on the value of actually reaching someone rather than spending days calling.
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Yuki Tanaka
Wait, I'm confused about this whole settlement thing. If you got money from your employer, doesn't that mean you can't get unemployment? I thought you had to choose one or the other. This is making me nervous about my own situation.
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Miguel Hernández
•No, that's not correct. Settlement payments and unemployment benefits serve different purposes. The settlement is typically compensation for the circumstances of your termination, while unemployment benefits are there to support you while you search for new work. You can receive both, though the timing might be affected.
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Yuki Tanaka
•Oh okay, that makes me feel better. I was worried I messed up by accepting the settlement.
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Esmeralda Gómez
The NYS Department of Labor system is so confusing about this stuff! I spent hours reading through their website trying to figure out similar questions. Why can't they just have clear examples of different scenarios instead of all this bureaucratic language?
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CaptainAwesome
Make sure you file your weekly claims correctly and report any income from the settlement period accurately. The job search requirements will still apply once your benefits start, so keep track of your applications and contacts. Also, if there are any ongoing legal matters related to your termination, be prepared to explain those during the adjudication process if they ask.
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KylieRose
•Good point about the job search log. I've already started keeping track since I figured I'd need to file soon. The legal stuff is all settled now, no ongoing issues.
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Philip Cowan
I went through something similar about 6 months ago. The settlement itself won't disqualify you from unemployment benefits, but timing matters. NYS DOL will want to know the exact dates of your last day of work versus when you received the settlement payment. If the settlement covers a period where you would have been working (like payment in lieu of notice), that might delay when your benefits can start. I'd recommend filing your claim as soon as possible since there's usually a waiting period anyway. The worst they can do is adjust the start date if needed. Also keep all your settlement paperwork - they might ask for copies during the review process.
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Riya Sharma
•That's really helpful information about the timing aspect! I hadn't thought about the settlement potentially covering a notice period. My last day of work was actually the day before I signed the settlement, so hopefully that keeps things straightforward. I'll definitely file as soon as possible like you suggested. Did you have any issues during your review process, or was it pretty smooth once you provided the documentation?
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Matthew Sanchez
I was in a very similar situation last year - got terminated during a "restructuring" and received a settlement with an NDA. The good news is that the settlement absolutely doesn't disqualify you from unemployment benefits. What matters most is that your termination was involuntary, which it sounds like it was. When you file your claim, you'll need to report the settlement amount and the dates, but be clear that the termination was due to restructuring and not your choice. The NYS DOL will review everything, but as long as you're honest about the circumstances and can show it was involuntary, you should be fine. One thing to watch out for - if any part of the settlement is considered "wages in lieu of notice," that might delay when your benefits start, but it won't prevent you from getting them eventually. I'd suggest filing sooner rather than later since there's already a waiting week built into the system.
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Javier Torres
•This is exactly what I needed to hear! It's reassuring to know that someone else went through the same thing successfully. I'm definitely going to file this week - better to get the process started even if there are delays. Quick question though - when you mentioned "wages in lieu of notice," how do you know if your settlement falls into that category? My settlement paperwork just calls it a "separation payment" but doesn't specifically mention notice period. Did you have to figure that out on your own or did NYS DOL help clarify during the review?
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StellarSurfer
I'm dealing with a similar situation right now and this thread has been incredibly helpful! I was laid off three weeks ago in what my company called "workforce optimization" and I'm about to sign a settlement agreement. Reading everyone's experiences here makes me feel much more confident about filing for unemployment benefits afterward. One question I have though - should I wait to sign the settlement until after I file my unemployment claim, or does the order not matter? I'm worried about creating any complications in the process. Also, has anyone had experience with how long the review process typically takes when there's a settlement involved? I'm trying to plan my finances accordingly.
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Ava Garcia
•Welcome to the community! From what I've learned reading through this thread, the order of signing the settlement versus filing for unemployment doesn't really matter - what's important is being transparent about both when you file your claim. Since your layoff was clearly involuntary ("workforce optimization" is just corporate speak for layoffs), you should be in good shape for benefits eligibility. I'd suggest not delaying either process - sign your settlement when you're ready and file for unemployment as soon as possible since there's already a built-in waiting period. As for timeline, it sounds like the review process can vary, but having clear documentation that shows involuntary termination (which you seem to have) should help move things along. The key is being upfront about everything from the start rather than having them discover information later.
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Natasha Kuznetsova
I'm currently going through something very similar - just got laid off last month with a settlement that included severance and an NDA. From what I've researched and based on what others have shared here, the key thing is that your termination was involuntary, which it clearly was since they called it "restructuring." The settlement payment itself won't disqualify you from unemployment benefits. When you file your claim, just be completely transparent about both the termination reason and the settlement details. NYS DOL will want to know the exact amounts and dates, but as long as you can show the termination wasn't your fault, you should be eligible. I filed my claim about two weeks after signing my settlement and the process has been straightforward so far. The only thing that might affect timing is if any part of your settlement is considered payment in lieu of notice, but even then it just delays when benefits start rather than preventing them entirely. My advice would be to file as soon as possible since there's already a waiting period built in anyway.
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Michael Adams
•Thanks for sharing your experience! It's really helpful to hear from someone who's currently going through this process. Two weeks after signing and things are going smoothly - that's encouraging. I'm curious about one thing you mentioned - how did you determine if any part of your settlement counted as "payment in lieu of notice"? My settlement agreement just mentions a lump sum severance payment but doesn't break down the components. Did NYS DOL ask you to clarify that during your filing, or was it pretty clear from your paperwork? I want to make sure I'm prepared with the right information when I file my claim this week.
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Zainab Khalil
I went through almost the exact same situation about 8 months ago - terminated during "restructuring" with a settlement that included severance and NDA. The good news is you absolutely can file for unemployment benefits! The settlement won't disqualify you as long as the termination was involuntary (which yours clearly was). When I filed, I was completely upfront about both the termination circumstances and the settlement details. NYS DOL asked for the settlement amount and dates, but since I could prove the termination wasn't my fault, I was approved. One tip - file your claim ASAP even while you're still figuring out all the details, because there's already a waiting week built into the system anyway. The review process took about 3 weeks in my case, but having clear documentation that showed involuntary termination really helped speed things up. Just be honest about everything from the start and you should be fine!
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