How to report lawsuit settlement on ESD weekly claim - wages vs. punitive damages?
I just won a wrongful termination lawsuit against my former employer and received a settlement that's being paid out this week. I'm still on unemployment and don't want to mess up my claim. The settlement has two parts - a small portion for lost wages (about 15%) and the rest is listed as punitive damages. Do I report the entire settlement amount on my weekly claim or just the wages portion? Has anyone dealt with this before? I've tried looking through the ESD website but can't find anything specific about lawsuit settlements. Should I try calling ESD before filing my weekly claim? I'm worried about reporting incorrectly and getting hit with an overpayment notice later.
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Amina Sy
Only report the lost wages portion on your weekly claim, not the punitive damages. The wages portion is considered income, but punitive damages aren't. Make sure you have documentation showing the breakdown between the two in case ESD asks for verification later. It should be clearly stated in your settlement agreement.
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Paolo Rizzo
•Thank you! The settlement paperwork does break it down pretty clearly. But I'm still a bit nervous since it's a large amount. Is there any way I should note this on my weekly claim, or just enter the wages amount in the earnings field?
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Oliver Fischer
congrats on winning ur case!!! i think the punitive damages r like pain and suffering $$ so that doesnt count as wages. my brother had something similar happen but with a car accident settlement and he didnt have to report the pain/suffering part to esd
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Paolo Rizzo
•Thanks! That's helpful to know. Did your brother have any issues with ESD questioning the settlement later?
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Natasha Ivanova
You definitely want to be careful with this. According to ESD guidelines, you only report the wages portion, not punitive damages. However, you should absolutely keep documentation showing the breakdown in case of an audit. The settlement agreement should explicitly state what portion is for lost wages versus punitive damages. If you're concerned, you can add a note in the comments section of your weekly claim explaining that you received a settlement and are reporting only the wages portion per ESD guidelines. This creates a paper trail of your good faith effort to report correctly.
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Paolo Rizzo
•Adding a note in the comments is a great idea - I didn't even think of that! I'll definitely do that along with keeping all my settlement paperwork organized. Thank you!
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NebulaNomad
I WOULD ABSOLUTELY CALL ESD!!! Don't just take advice from random internet people on something this important! I got hit with a $4,800 overpayment because I misreported something and it was a NIGHTMARE to fix. If you report wrong they'll come after you later and you'll be stuck dealing with appeals and hearings. Just call and ask them directly!!!!!
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Javier Garcia
•I tried calling ESD last week about a different issue and spent 2 hours on hold before getting disconnected. I've found that using Claimyr actually works to get through to an agent quickly. Just go to claimyr.com and they'll call you when they connect you to an ESD agent - saved me hours of frustration. They have a demo video at https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3 that shows how it works. Worth it when you need a definitive answer directly from ESD.
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Emma Taylor
when i got my backpay from esd last year i had to report it all even tho it was for weeks i already claimed is this kind of the same thing or different? im confused about the punative damages part does that mean like extra money they gave you to punish the company?
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Natasha Ivanova
•Backpay from ESD is different from a lawsuit settlement. Your backpay was unemployment benefits owed to you, which is why you had to report it. Punitive damages in a lawsuit are meant to punish the employer for their wrongdoing - they're not considered wages or income replacement in the same way. That's why only the portion of a settlement specifically designated as lost wages needs to be reported to ESD as earnings.
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Malik Robinson
My cousin works at a law firm and says this comes up all the time. You only report the wages portion, NOT the punitive damages. But keep records of everything for at least 5 years in case there's ever a question about it. The settlement paperwork should clearly state which portion is for lost wages and which is punitive.
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Paolo Rizzo
UPDATE: I called ESD this morning and finally got through to someone after using that Claimyr service. The agent confirmed that I should only report the wages portion of the settlement on my weekly claim. She also suggested I add a note in the comments section explaining that I received a settlement and am reporting just the wages component. Thanks everyone for your help!
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Amina Sy
•Glad you got through to them! Always best to get the official word directly from ESD. Make sure to keep that settlement documentation somewhere safe in case they ever have questions about it in the future.
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