Can taxes be taken out of severance pay?
I was laid off on 10/3/01. My employer said he would give two months' pay and three months' health benefits, and that he would pay me in the next four paycheck cycles. I have asked for this in writing and have not yet received anything from him. He requested all keys from me on 10/3/01, has disconnected my designated phone line, and has taken my name off of the company directory on the website. I have applied for unemployment.
Question: Since I am no longer an employee of the company, can he still take taxes out of my severance pay? If so, how does this affect my application for unemployment?
Answers (1)
Unless there is a reason to characterize it differently ( such as compensation for a potential claim allowing recovery for emotional distress damages) your severance pay is probably properly subject to standard wage payment deductions. EDD will be better able to answer your Q re unemployment benefits -- you can call them anonymously if you wish. My understanding is that salary continuation will affect your unemployment whereas a lumpsum payment at the conclusion of work (ussually for back wages/benefits owed or in exchange for a release of liability) will not.
posted by Richard J. Vaznaugh | Oct 10, 2001 11:53 AM [EST]
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