Can you collect unemployment if you receive a settlement - NYS Department of Labor rules?
I'm in a weird situation and can't find clear info anywhere. I was laid off from my warehouse job in December and have been collecting UI benefits through NYS Department of Labor. Now my lawyer says we're close to settling my workers comp case from an injury I had at my previous job (different employer from 2 years ago). The settlement would be around $18,000. Does anyone know if getting a workers comp settlement affects your unemployment eligibility? I'm scared they'll make me pay back benefits or cut me off completely. The settlement is for medical bills and lost wages from way before my current claim period.
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Lydia Bailey
Workers compensation settlements generally don't affect your unemployment benefits as long as the settlement is for a different period of employment than what you're claiming UI for. Since your settlement is from 2 years ago and your current unemployment claim is from December 2024, they're separate issues. However, you should report the settlement to NYS Department of Labor when you file your weekly claim just to be safe. The key is that workers comp isn't considered wages for unemployment purposes.
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Marcus Patterson
•Thank you! That's a huge relief. So I just check the 'other income' box on my weekly certification and explain it's a workers comp settlement from previous employment?
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Mateo Warren
I had something similar happen last year. Got a settlement from a car accident while on unemployment and it didn't affect my benefits at all. The NYS Department of Labor rep I talked to said as long as it's not wages or severance from your current claim period, you're good. Still reported it though because I didn't want any issues later.
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Marcus Patterson
•How did you report it exactly? Did you have to send documentation or just mention it in the weekly claim?
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Mateo Warren
•I just wrote a brief explanation in the comments section of my weekly claim. Something like 'received settlement for car accident from 2022, not related to current employment.' Never heard anything back about it.
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Sofia Price
Actually this is more complicated than people are saying. ANY income can potentially affect your benefits depending on how NYS Department of Labor classifies it. Workers comp settlements sometimes get treated as deferred wages if they include lost wage components. You really need to call them and ask specifically about your situation before you assume anything.
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Marcus Patterson
•Great, now I'm worried again. I've been trying to call NYS Department of Labor for weeks but can never get through. The phone just rings forever or hangs up.
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Alice Coleman
•If you're having trouble getting through to NYS Department of Labor, I used a service called Claimyr that actually got me connected to an agent in like 15 minutes. They have this system that handles all the calling and waiting for you. Check out claimyr.com - they even have a video demo at https://youtu.be/qyftW-mnTNI showing how it works. Might be worth it for something this important.
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Owen Jenkins
ugh the whole system is so confusing!! i got a settlement from my old job last month (sexual harassment case) and panicked thinking i'd lose my benefits but nothing happened when i reported it. i think as long as its not regular wages your probably fine but definitely report it to cover yourself
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Marcus Patterson
•Did you report it right away or wait? I'm getting the settlement check next week and don't want to mess anything up.
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Lilah Brooks
Just be transparent about it. The worst thing you can do is not report income and have them find out later. Then you're looking at overpayment notices and penalties. Better to report it and have them say it doesn't matter than to hide it and get in trouble.
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Margot Quinn
I work as a benefits counselor and deal with these situations regularly. The key distinction is that workers comp settlements are typically NOT considered "wages" for unemployment purposes, especially when they're from a different employer and time period like yours. However, NYS Department of Labor does want you to report ALL income sources. When you file your weekly claim, select "other income" and briefly describe it as "workers comp settlement from previous employer injury in 2022." Since it's compensating you for past medical expenses and lost wages from before your current benefit year, it shouldn't reduce your weekly benefit amount. The fact that it's a lump sum settlement rather than ongoing payments also works in your favor. Still, definitely report it to stay compliant - transparency is always the best policy with unemployment claims.
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Micah Franklin
•This is really helpful advice from someone who actually knows what they're talking about! @Margot Quinn - do you know if there s'a specific dollar amount threshold where settlements might be treated differently? I m'wondering if my $18,000 settlement is considered large "enough" to potentially cause issues, or if the amount doesn t'matter as much as the source and timing like you mentioned.
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Aileen Rodriguez
I went through something very similar last year with a workers comp settlement from an old job while collecting UI. The amount doesn't really matter - I received $22K and it had zero impact on my benefits. What matters is that it's compensating you for past injuries/wages from a different employment period than your current claim. When I reported it, I just wrote "Workers compensation settlement - injury from previous employer 2022" in the other income section. Never heard a peep from them about it. The key is being upfront about it rather than trying to hide it. Your situation sounds textbook - different employer, different time period, medical/injury related. You should be fine!
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NeonNebula
•@Aileen Rodriguez This is exactly what I needed to hear! The fact that you had a similar amount $22K (vs my $18K and) no issues gives me so much peace of mind. I ve'been losing sleep over this thinking they d'come after me for overpayments or something. Your wording suggestion is perfect too - Workers "compensation settlement - injury from previous employer 2022 is" clear and straightforward. Thanks for sharing your experience! Did you report it the same week you received the settlement check or could you report it the following week when you do your regular certification?
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Miguel Ortiz
I'm actually going through the exact same situation right now! Got laid off in November and have been on UI, and just got word that my workers comp case from a back injury at my old job in 2021 is settling for about $15K. Reading through these responses has been super helpful - sounds like the consensus is that since it's from a different employer and time period, it shouldn't affect benefits as long as you report it properly. I'm planning to use the wording suggestions here when I file my weekly claim. It's such a relief to see others have gone through this without issues. The NYS system is confusing enough without having to worry about losing benefits over something that's completely unrelated to your current claim!
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Lucas Bey
•@Miguel Ortiz It s'crazy how many of us are dealing with this exact situation! I was so stressed about it until I found this thread. Your timeline is almost identical to mine - laid off recently, workers comp from years ago at a different job. I think we re'both overthinking it honestly. From what everyone s'saying, the key points are: 1 different) employer, 2 different) time period, 3 it) s'compensation for past medical/injury costs, not current wages. As long as we report it transparently when we certify, we should be golden. I m'definitely using that wording format too - Workers "compensation settlement - injury from previous employer [year] seems" like the perfect way to describe it clearly without being overly detailed.
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