Received severance pay - Will ESD reject my unemployment claim?

you have to report the severance on ur weekly claims. esd will probably count it as income for those weeks and u wont get benefits while ur getting severance. but u should DEFINITELY file right away anyway! dont wait until the severance ends. once the severance is done u can get benefits if ur still unemployed

The previous commenter is mostly correct, but let me clarify a few important details. In Washington state, severance pay IS considered earnings and must be reported on your weekly claims. However, how ESD treats your severance depends on how it's paid out: 1. If you receive severance as a lump sum, ESD will allocate it over the weeks it represents (in your case, 8 weeks) and reduce your benefits accordingly. 2. If you receive it as weekly payments, you'll report each payment for the week received. You should absolutely file your initial claim immediately even though you're receiving severance. This establishes your claim and benefit year. Once your severance allocation period ends, your regular unemployment benefits can begin without a gap if you continue filing weekly claims. Also important: during the weeks you're receiving severance, you still need to meet all other eligibility requirements (being able to work, available for work, and completing job search activities) to keep your claim active.

I went through this EXACT situation last year!!!! File your claim RIGHT NOW - don't wait! My company gave me 12 weeks severance (was with them for 10 years) and I thought I couldn't apply until it ran out. BIG MISTAKE!!! I waited and lost out on establishing my claim earlier. Also make sure you understand how your severance is calculated - mine wasn't just straight salary, it included some other stuff that HR didn't explain well. Had to call ESD like 5 times to sort it out.

Former HR manager here. Most people don't realize that WHEN you file your initial claim is crucial. The ESD calculates your benefit amount based on your earnings during a specific base year (the first 4 of the last 5 completed calendar quarters before filing). Filing immediately could give you a higher weekly benefit amount if your earnings were higher in the earlier quarters of that base year. Also, make sure to correctly classify your severance when reporting. ESD has specific fields for severance pay as opposed to regular wages. Misreporting can lead to overpayment issues later. Lastly, keep detailed records of all communications with your former employer about the severance. Sometimes there are disputes about the nature of payments (severance vs. vacation payout vs. bonus) that can affect how ESD treats them.

I tried calling ESD 3 times with almost this exact question last month and couldnt get through - kept getting the 'high call volume' message and it hung up on me every time!!!

Everyone is giving good advice about filing right away, but don't forget about the TAX implications!!! Your severance will be taxed as regular income, but unemployment benefits are ALSO taxable, and ESD doesn't automatically withhold taxes like your employer did. You need to specifically request tax withholding on your ESD benefits or you'll be hit with a big tax bill next year. I learned this the hard way in 2023 and ended up owing over $2,000 that I wasn't expecting. Set aside money for taxes if you don't opt for withholding!

Just wondering has anyone had issues with the standby status thing when getting severance? my friend said she got denied standby bcuz she was getting severance and had to do the job search stuff right away

Thanks everyone for the incredibly helpful advice! Just to update - I went ahead and filed my initial claim today. The ESD website actually had a specific section for reporting upcoming severance pay, so that was easier than expected. I reported that I'll be receiving the lump sum next week representing 8 weeks of pay. I've also started my job search log since I need to report activities each week even during the severance period. The ESD agent I spoke with (finally got through!) confirmed that once the 8-week severance allocation ends, my regular benefits should start automatically as long as I keep filing my weekly claims. Really appreciate all the help navigating this!