Can I collect unemployment if I sign a separation agreement - NYS Department of Labor eligibility question
My company is offering me a separation agreement with severance pay but I'm worried about whether I'll still be able to file for unemployment benefits with NYS Department of Labor. The agreement includes a non-compete clause and mentions I'm voluntarily leaving. Will signing this hurt my chances of getting UI benefits? Has anyone been through this situation before? I really need the severance money but can't afford to lose unemployment eligibility.
12 comments


Beatrice Marshall
You can usually still collect unemployment even with a separation agreement, but the key is how NYS Department of Labor classifies your departure. If it's truly involuntary (layoff, position elimination) and you're just signing to get severance terms, that shouldn't disqualify you. The language about 'voluntary' departure might be concerning though - make sure the agreement clearly states the employer initiated the separation.
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Mae Bennett
•The company is eliminating my whole department so it's definitely not my choice. Should I ask them to change the voluntary language in the agreement?
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Melina Haruko
i signed one of those last year and got unemployment no problem but mine said i was laid off due to business reasons
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Dallas Villalobos
The separation agreement itself won't automatically disqualify you, but NYS Department of Labor will look at the actual circumstances of your job loss. If you were laid off or your position was eliminated, that's involuntary separation regardless of what paperwork you sign. However, if there's any suggestion you quit voluntarily or were fired for misconduct, that could create issues. Review the agreement carefully and make sure it accurately reflects that this was the employer's decision, not yours.
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Mae Bennett
•That makes sense. The severance is contingent on signing but the layoff is happening either way. I'll make sure the agreement reflects that.
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Reina Salazar
Wait, what about the severance pay itself? Won't that affect when I can start collecting benefits? I thought you had to wait until severance runs out.
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Beatrice Marshall
•Severance pay can affect the timing of your benefits depending on how it's structured. If it's considered wages in lieu of notice, it might delay your eligibility. But if it's just a lump sum separation payment, it usually doesn't affect your weekly benefit timing.
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Saanvi Krishnaswami
I had major issues getting through to NYS Department of Labor when I had questions about my separation agreement situation. Kept getting disconnected after waiting on hold forever. Finally used this service called Claimyr (claimyr.com) that actually got me connected to a real person who could review my specific case. They have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Saved me weeks of frustration trying to get clarity on whether my agreement would affect my benefits.
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Mae Bennett
•Thanks for the tip! I definitely want to talk to someone at NYS Department of Labor before I sign anything just to be sure.
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Demi Lagos
The whole system is so confusing! Why can't they just have clear guidelines about separation agreements on their website? Every situation seems different and you never know what's going to trip you up.
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Ethan Wilson
I went through this exact situation about 8 months ago with my company in NYC. The key thing that helped me was getting a letter from HR confirming that my position was being eliminated due to restructuring, even though I signed a separation agreement. When I filed my unemployment claim, I uploaded that letter along with the separation agreement. NYS Department of Labor approved my benefits without any issues. The severance didn't delay my benefits either since it was a lump sum payment, not ongoing wages. Just make sure you're honest about everything when you file - they can see if you received severance pay anyway, so transparency is your best bet.
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Isabella Silva
•That's really helpful to know! I'm also in NYC so this gives me hope. Did you have to wait long for approval or was it pretty straightforward once you submitted everything? I'm worried about any delays since I need to start receiving benefits as soon as possible after my last day.
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