Do I report severance pay to ESD after permanent layoff? Will it affect my unemployment benefits?

Yes, you absolutely must report the severance pay to ESD when you file your weekly claims. According to Washington state unemployment rules, severance is considered reportable income for the week(s) it covers. How it affects your benefits depends on how they structure the payment. If they give you a lump sum payment but designate it as covering multiple weeks (like 4 weeks of pay), ESD will allocate that over those weeks and reduce/eliminate your benefits during that period. If it's just a one-time payment not allocated to specific weeks, it typically affects just the week you receive it. After the severance period is over, you can continue collecting your regular unemployment benefits up to your maximum benefit amount. The severance doesn't reduce your total claim balance - it just potentially pauses or reduces payments temporarily.

Been thru this exact thing last year. The HR dept should give you paperwork showing if the severance is allocated over multiple weeks or just a lump sum. MAKE SURE to report it correctly on your weekly claim when you get it!!! If ESD finds out later you didn't report it, you'll get hit with an overpayment notice plus penalties. Severance doesn't affect your total benefit amount - you'll still get your maximum weeks of benefits, just delayed by however many weeks your severance covers. And remember to switch from standby to regular unemployment status and start doing your 3 job search activities every week!

You definitely need to report it!!! My brother didn't report his severance and ESD found out 6 months later. They made him pay back $4,600 in benefits plus a 50% penalty!!! Don't make that mistake. Also your standby status will probably end when your company officially closes. You'll need to start doing job searches every week (3 activities) and documenting them. The system should prompt you about this change when you do your weekly claim after the standby period ends.

I got laid off in 2020 and reported my severance pay just how they said. ESD is weird sometimes abt how they handle it. They count it as earnings for the week you receive it OR they spread it over weeks - depends on how your HR words it in your severance docs. But either way after that period, I got my full unemployment for the max weeks. The system will tell you when you need to start job searching instead of standby, just answer the questions honestly each week.

To accurately answer your questions: 1. Yes, all severance pay must be reported to ESD when filing your weekly claims. 2. Severance doesn't reduce your total benefit amount, but it may temporarily reduce or eliminate your weekly payments during the period the severance covers. I recommend checking if your severance package specifies it covers a particular time period. If it's allocated over multiple weeks, ESD will distribute it accordingly. If it's considered a one-time payment, it generally only affects the week you receive it. Regarding your standby status - when the company officially closes, you'll need to transition to regular unemployment status and begin conducting job search activities (3 per week). You should proactively report this change to ESD through your eServices account rather than waiting for automatic detection. Make sure to keep detailed records of all correspondence regarding your severance package. This documentation will be crucial if there are any questions from ESD about your benefits.

Has anyone here actually been able to get through to ESD on the phone lately?? I've been trying to ask them a similar question about my severance for TWO WEEKS and can't get past their stupid automated system! SO FRUSTRATING!!! 😡

wait ur company was shut down permanently after telling u it was temporary?? thats exactly what happened to me!! they strung us along for like 4 months saying we'd be back soon then boom, closed forever. such bs. anyway i got severance too and reported it on my weekly claim for the week i got it. my severance letter didnt say it was for specific weeks so esd just counted it as income for that one week. i still got my full unemployment benefits after that week.

Just to follow up on your standby status - you should proactively contact ESD to update your status from standby to regular unemployment. When your standby period ends (either the originally approved period or when your company officially closes), you must immediately begin conducting and documenting your job search activities (3 per week). Also important: Once you switch from standby to regular unemployment, you must be able and available for work each week. This means you need to be actively seeking suitable work and ready to accept job offers. If you're planning any vacations or time away, be aware this could affect your eligibility during those weeks. Regarding your maximum benefits - yes, you can still receive your full maximum benefit amount (MBA) over time, but the weeks you receive severance pay may delay when you can access those funds if the severance is allocated over multiple weeks.

Sorry to hear about your situation - it's really tough when companies string you along like that. I went through something similar a few years back. Just wanted to add that when you do report your severance, make sure you have the exact dollar amount and date you received it. ESD can be picky about details. Also, once you transition off standby, keep really good records of your job search activities. I use a simple spreadsheet with company names, positions applied for, dates, and method of contact. Makes it easy when you file your weekly claims and if ESD ever audits your job search later. One more tip - if your severance pushes you into a higher tax bracket for the year, you might want to talk to a tax professional about potential quarterly payments. Getting unemployment plus a lump sum severance can sometimes create a surprise tax bill come April. Good luck with everything!

I'm sorry to hear about your situation - it's really frustrating when companies aren't upfront about permanent closures from the start. I went through something similar with my previous employer about 18 months ago. One thing I'd add that others haven't mentioned: if your severance is significant, you might want to ask ESD about voluntary withholding for taxes on your unemployment benefits. Since you'll be getting both severance and unemployment income, it could push you into a higher tax bracket. You can have 10% withheld from your weekly unemployment payments to avoid a big tax bill next April. Also, when you do switch from standby to regular unemployment status, the job search requirements can feel overwhelming at first. My advice is to set up job alerts on multiple sites (Indeed, LinkedIn, company websites) so you're not scrambling each week to find 3 activities. Even attending virtual job fairs or networking events counts toward your weekly requirement. The good news is that once you get through the severance period, your unemployment benefits will continue as normal. Just be super careful about reporting everything accurately - it's not worth the risk of an overpayment down the line. Hang in there! The job market is actually pretty good right now in most fields.

I'm sorry you're going through this - the uncertainty of thinking you'd go back to work only to find out the company is closing permanently must be really stressful. I've been in a similar situation and can share what I learned. Definitely report your severance pay when you file your weekly claims. The key thing is how your employer structures it in the paperwork. If they allocate it over specific weeks (like "2 weeks severance pay"), ESD will spread it out and you won't get unemployment during those weeks. If it's just a lump sum without specific week allocations, it usually only affects the week you receive it. For your standby status, you'll need to proactively update this once your company officially closes. Don't wait for ESD to figure it out automatically - log into your eServices account and report the change. Once you're off standby, you'll need to start doing 3 job search activities per week and be available for work. The silver lining is that severance doesn't reduce your total unemployment benefit amount - it just might delay when you can collect it. Keep all your severance documentation handy in case ESD has questions later. Best of luck with your job search!

I'm really sorry to hear about your situation - it's so frustrating when companies keep you on standby for months only to spring a permanent closure on you. I went through something very similar about two years ago. Definitely report that severance pay on your weekly claims! The way it affects your benefits really depends on how your HR department words it in the paperwork. If they say it's "in lieu of X weeks of notice" or covers specific weeks, ESD will allocate it over that time period and you won't get unemployment during those weeks. If it's just described as a lump sum payment without being tied to specific weeks, it typically only affects the week you actually receive it. One thing I learned the hard way - make sure to update your status from standby to regular unemployment as soon as the company makes the closure official. Don't wait for ESD to automatically figure it out. You can do this through eServices, and then you'll need to start doing your 3 job search activities each week. The good news is your severance doesn't reduce your maximum benefit amount - you'll still be eligible for all your weeks of unemployment, just potentially delayed by however the severance is structured. Keep all your paperwork from HR about the severance terms in case ESD has questions later. Hang in there - I know it's scary right now, but you'll get through this!

I'm really sorry you're dealing with this - having a "temporary" layoff turn permanent after months of waiting is incredibly stressful and unfortunately happens way too often these days. Everyone here has given you great advice about reporting the severance. I'll just add that when you get your severance paperwork, read it very carefully to see if it mentions anything like "payment in lieu of notice" or "covers X weeks of salary." That specific language will determine how ESD handles it. Also, since you mentioned you've been on standby since June - definitely be proactive about switching to regular unemployment status once your company officially closes. I'd recommend calling ESD rather than just updating online, since standby cases sometimes need manual review when they convert to regular claims. One practical tip: start preparing your job search strategy now while you're dealing with the severance paperwork. Set up profiles on job sites, update your LinkedIn, and maybe start networking so you're ready to hit the ground running once you're required to do those 3 weekly job search activities. The uncertainty is the hardest part, but at least now you know where you stand and can plan accordingly. Best of luck with everything!

I'm so sorry you're going through this - being strung along for months thinking you'd return to work only to find out the company is permanently closing is really tough. I went through something similar when my employer kept us on "temporary furlough" for 8 months before finally admitting they were shutting down. Yes, you absolutely must report your severance pay on your weekly claims. How it affects your benefits depends entirely on how your HR department structures it in the paperwork. If they designate it as covering specific weeks (like "4 weeks of severance pay" or "payment in lieu of 30 days notice"), ESD will spread it over that time period and pause your unemployment during those weeks. If it's just described as a lump sum without being tied to specific time periods, it typically only affects the week you receive it. The important thing to remember is that severance doesn't reduce your total benefit amount - you'll still be eligible for your full maximum weeks of unemployment, just potentially delayed. For your standby status, you'll need to proactively contact ESD to switch to regular unemployment once your company officially closes. Don't wait for them to figure it out automatically. Once you make that switch, you'll need to start doing 3 job search activities per week and be available for work. Keep all your severance documentation - ESD might ask questions later and you'll want to have everything clearly documented. Hang in there - this process is stressful but you'll get through it!

I'm really sorry you're dealing with this situation - having a temporary layoff turn permanent after months of uncertainty is incredibly stressful, and unfortunately it's becoming more common. You've gotten excellent advice here already, but I'll add a few practical points from my own experience going through this about a year ago: 1. When you get your severance paperwork, look specifically for language like "payment in lieu of notice," "covers X weeks of salary," or any mention of specific time periods. This exact wording determines how ESD allocates it. 2. Don't wait for ESD to automatically update your standby status - be proactive and call them once your company makes the closure official. Standby conversions sometimes get stuck in their system. 3. Start preparing your job search materials now (resume, LinkedIn, etc.) so you're ready when the job search requirements kick in. It's easier to tackle this prep work while you're dealing with severance paperwork than scrambling later. 4. Keep detailed records of everything - severance agreement, company closure notices, all ESD correspondence. If there are any questions or issues later, you'll have everything documented. The uncertainty is the hardest part, but at least now you have clarity and can move forward with a plan. Best of luck with your job search when you're ready!

I'm really sorry you're going through this - the whole "temporary" layoff situation that turns permanent is so frustrating and sadly way too common these days. Companies seem to use it to avoid giving proper notice or dealing with the immediate severance obligations. Just wanted to add one thing that hasn't been mentioned yet - when you do get your severance, make sure to ask HR for a clear breakdown of exactly what time period it covers (if any) and get that in writing. Sometimes the initial paperwork isn't specific enough for ESD's requirements, and you don't want to be guessing later when you're filing your claims. Also, if you haven't already, consider setting up direct deposit for your unemployment benefits if you're not getting them that way already. Once you transition off standby and start getting regular payments again after any severance period, it'll be one less thing to worry about. The job market is actually pretty decent right now in most areas, so try to stay optimistic! I know it's scary after being with the same company for 11 years, but this could end up being an opportunity to find something even better. Good luck with everything!

I'm so sorry you're dealing with this - being kept on standby for months only to find out it's actually permanent is really tough. I went through something similar last year when my company did the same thing. Yes, you absolutely need to report your severance pay on your weekly claims. The key is how your HR department words it in the paperwork. If they say it covers specific weeks or is "in lieu of notice," ESD will spread it out over those weeks and you won't get unemployment during that time. If it's just a lump sum without being tied to specific weeks, it usually only affects the week you receive it. For your standby status - definitely be proactive about updating this with ESD once your company officially closes. Don't wait for them to figure it out automatically. You can do this through eServices or by calling them directly. Once you switch to regular unemployment, you'll need to start doing 3 job search activities per week. The good news is that severance doesn't reduce your total unemployment benefit amount - you'll still get your full weeks of benefits, just potentially delayed depending on how the severance is structured. Make sure to keep all your severance documentation in case ESD has questions later. Hang in there - I know this whole situation is stressful, but you'll get through it!

I'm really sorry to hear about your situation - being told it's "temporary" for months only to find out the company is closing permanently is so frustrating and unfortunately way too common these days. Yes, you absolutely must report your severance pay on your weekly ESD claims. How it affects your benefits depends entirely on how your employer structures it in the paperwork. If they allocate it over specific weeks (like "2 weeks severance" or "payment in lieu of 30 days notice"), ESD will spread it over that time period and you won't get unemployment during those weeks. If it's just a lump sum without specific week allocations, it typically only affects the week you receive it. The important thing to remember is that severance doesn't reduce your total benefit amount - you'll still be eligible for your full maximum weeks of unemployment benefits, just potentially delayed. For your standby status, you'll need to proactively contact ESD to update to regular unemployment once your company officially closes. Don't wait for them to figure it out automatically - log into eServices or call them directly. Once you make that switch, you'll need to start doing 3 job search activities per week. Keep all your severance documentation organized in case ESD has questions later. I know this whole process feels overwhelming right now, but you'll get through it. The job market is actually pretty good right now, so try to stay optimistic about finding something new. Good luck!

I'm so sorry you're going through this - being strung along for months thinking you'd return to work only to find out the company is permanently closing is incredibly stressful and unfortunately all too common these days. You've gotten excellent advice here already, but I wanted to add one important tip: when you receive your severance paperwork, take photos or scan copies of everything before you submit any forms back to HR. Sometimes companies make changes to severance agreements after the fact, and having your own documentation can be crucial if there are any disputes later. Also, once you transition from standby to regular unemployment, consider setting up email alerts from job boards early so you're not scrambling each week to find your 3 required job search activities. Sites like Indeed, LinkedIn Jobs, and even company career pages often have alert features that can help streamline your search process. One more thing - if your severance amount is substantial, you might want to consider having taxes withheld from your unemployment payments to avoid a surprise tax bill next year. You can request 10% withholding through your ESD account. The uncertainty you've been dealing with for months is finally over, and while it's scary, at least now you can make concrete plans. After 11 years with one company, you have valuable experience that employers will appreciate. Hang in there!